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Institute for the Study of Gambling and Commercial Gaming-025

College of Business Administration
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University of Nevada, Reno
Maintained by: Judy Cornelius
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Last Modified: 12/04/2002

Mary Ann Perkins*

Much has been written about the equipment, the floor layouts, the marketing programs and the financial backing required for a successful casino opening. Less has been put forward, however, about how gaming companies develop their people and their organizations to deliver on the expectations created by a spacious new building or an authentic riverboat in a new or existing market.

With casinos opening in many new jurisdictions throughout the United States as well as in other countries, management theories are being developed which describe the organizational criteria that can lead to a successful casino opening. Whether looking at opening one of the largest hotel casino complexes in the world or a small riverboat casino operation, many of the characteristics are the same.

Starting a casino in a community new to gaming brings with it a learning curve for owners and operators as well as the pool of applicants seeking employment in this exciting new industry. It is interesting to note that many of the same management principles apply equally in new jurisdictions and in existing markets.

Research conducted by University of Michigan professor David Ulrich describes ways an organization can capture and sustain a competitive advantage (Ulrich 1989). He identifies four critical sources of competitive advantage: economic/financial capability, strategic/marketing capability, technological capability, and organizational capability. His work indicates most firms within a designated industry have very similar access to financing, marketing, and products. However, these same companies can set themselves apart by focusing on their people, their organizations, and their capacity to build a responsive people system that will capture a competitive advantage. It is easy to talk about responding organizationally, but it is not as easy to execute that strategy.

The focus of this article is to develop a framework against which Chief Executive Officers and senior management teams can check their organizational systems by reviewing ways to effectively manage people, strategies to develop an organization that will make a property competitive in a new market, and methods to introduce innovative people systems during a start-up.

To gather data for this article, the author's casino opening experience spanning the 1984-1994 time frame has been combined with information obtained in interviews with casino executives who have recent experience in opening all sizes and types of casinos. Some common organizational problem areas were noted:

• inexperienced leadership;
• neglecting basic employee needs;
• inaccurate staffing levels;
• failing to communicate clear and realistic expectations; and
• lack of attention to managing critical transitions.

The observations and suggestions about managing people contained in this analysis are offered to those responsible for planning, designing, and opening casino gaming operations of the future. Experiences from the casino industry -- as well as the development of such an approach with one work group, the slot department of the MGM Grand Hotel, Casino and Theme Park in Las Vegas -- are examined in an effort to identify, organizationally, successful strategies and potential pitfalls which can exist during start-ups.

Inexperienced Leadership

Various characteristics of effective leaders are well documented: leaders are visionaries, strategic thinkers, skilled delegators, risk-takers, superb people managers, competent financial analysts, and they exhibit marketing acumen. Spencer and Spencer, in their book, Competence at Work, describe leadership characteristics of successful sales personnel which can also be applied to executives in the gaming industry:

• a high level of achievement motivation (someone who sets himself ambitious yet achievable goals and uses his time efficiently);
• an abundance of initiative (someone with lots of persistence who is able to respond competitively when challenged);
• strong interpersonal skills and the ability to decipher the attitudes and nonverbal behavior of others; and
• self-confidence (someone with no hesitation in taking on challenging assignments).

While not every effective casino executive needs to have worked his or her way up through the organization from a 21 dealer or a slot mechanic to a senior casino manager, an important additional quality is a thorough understanding of casino operations. Successful gaming industry executives also pride themselves on their ability to recruit and develop effective teams.

Ideally, it is probably best to hire managers and supervisors who have opened a casino before. Top decision-makers will recognize that the skills required to execute a successful opening may be different from those needed to operate in a day to day environment. Managers and supervisors should be comfortable conceptualizing the project and its components. Managers who are entrepreneurial and flexible in their management styles often do well in a start-up environment. Conversely, a person who relies on the rule book to guide decision making may be uncomfortable since the rule book is often being written as the property is being opened. One casino executive stated, "Some people with opening experience may not like living with a finished product, especially if they don't get everything they wanted." Thus, he expresses the belief that running a property is very different and much less exciting than opening one.

When senior management focuses its discussions in an interactive manner to develop the vision and market position for the property, it is usually very productive. It is important to have a strategic planner on the team early enough to write the plan, develop each functional budget and monitor requests from fellow executives for additional funds. The goal is to be clear about what attributes will make the property successful, to allocate proper resources to achieve that success, and to identify means to effectively communicate these attributes in a way that will generate excitement and confidence among employees.

Companies with multiple casino locations have an advantage when identifying managerial candidates. Often, they can move managers from one location to another. The transfer of culture is much easier since the manager already knows what the company wants to provide for its customers and what it expects from its employees. These companies can also access "opening teams" -- employees who travel from a sister property to assist with the pre-opening training activities, or to work scheduled shifts during the first few weeks the property is open.

Eventually, employees at all levels need to receive the same message about the property. Dave Wirshing, former President and CEO of the Fitzgerald Gaming Corporation, noting the mix of cultures that can result when a new company is established or a new property opened, says, "Unless the leaders share the same values and culture and come together as a team soon enough in the development process to understand the big picture, you will have an assortment of operating styles which is sometimes difficult to untangle." Effective leaders are learning how to utilize the people in the organization to make these messages clear and create one set of core values from which to work.

On December 17, 1993, the MGM Grand, the world's largest hotel and casino, opened in Las Vegas. It opened below budget and three and one half months ahead of schedule. The slot department consisted of 500 employees and 3,506 machines, a high limit player area, and all aspects of slot marketing and player tracking. Andy Hommel, MGM's Vice President of Slots, had opened the Golden Nugget in Atlantic City and had definite ideas about how he wanted -- and did not want -- to operate. Hommel hired Perkins Corporation as the training consultant to the slot department to help prepare people and to develop training and communication programs for opening the world's largest slot operation.

Opening teams can learn by carefully studying previous openings to better understand what works or does not work. A mistake opening teams can make is to assume the problems which occurred during one opening will not be repeated. Thus, the MGM, Hommel and team learned as much they could about the openings of The Mirage in Las Vegas, the Grand Casinos on the Gulf Coast, the Taj Mahal in Atlantic City, and other American properties with recent opening or expansion experience. Much emphasis was placed on developing the MGM's slot operating philosophy, the operating procedures, the slot floor layout, the types of equipment to be used, and the demands the opening would place on the energy level of the entire team.

Hommel looked for start-up skills and opening experience in the candidates he considered for his team, but when it was not available, he focused on the skills which he felt made an equally important contribution to the team. These skills were customer relations, high limit player development experience, transition management (during ownership changes in a major Strip property), slot analysis, and slot security systems.

The slot team spent considerable time developing its own vision and mission statement and logo that would coincide with the property's statements. They wanted to articulate the aspects of the MGM's slot operation that would set it apart from others in the Las Vegas market. Considerable time was spent deciding how to communicate this information to all new employees.

The eight senior slot directors were hired at different intervals ranging from two years to four months prior to opening. An important staffing decision was made to bring the 30 shift managers onto the payroll thirty days prior to opening. They played a key role in developing procedures, designing and delivering training sessions, assisting with machine installation and various other duties, all of which allowed them to learn about the casino floor, the property and the philosophy of the department.

Hommel was a hands-on manager who continually challenged his team to verbalize the unique aspects of the operation. He conducted regular luncheon meetings ("Pizza with Andy") with the staff in a setting that reinforced the department's mission and encouraged two-way communication. He also challenged his management team to disagree with him. He placed a high value on managers who would bring new information and different points of view to any discussion.

The characteristics of effective leadership and the level of experience of the slot team played an important role in the development of the property's slot strategy. The interaction among slot management, the general manager and the president of the property also helped integrate the slot strategy into the overall property mission. Although technical problems with a coinless slot system and the player tracking system delayed the introduction of that technology beyond opening, overall the slot opening was considered to be highly successful.

Experienced leadership, particularly in the most senior level positions of the operation, is a critical component to a successful opening. Being able to recognize and recruit talented individuals -- who might often have limited gaming experience -- whose skills will intertwine with those of the rest of the team is also important. Individuals in leadership positions will have ample opportunity to use their administrative, communication and problem-solving skills during the months and weeks prior to opening a new casino.

Neglecting Basic Employee Needs

In the race to manage blueprints, floor layouts, major purchases, new systems, marketing campaigns, staffing levels, wage and salary items, and a myriad of other details involved in a start-up, sometimes the most basic of employee needs are overlooked.

This often happens even before the casino opens. During the start-up phase, the most important question prospective employees have for employers is, "Did I get the job?" With Human Resources departments accepting hundreds and thousands of employment applications for all available positions, some paperwork and even some people can get lost in the shuffle. Easy-to-administer applicant tracking systems should be established early in the planning process. At any given time, it should be possible for a department manager to know how many applications have been received, how many interviews have been conducted, how many job offers have been extended, how many offers have been accepted, how many security clearances have been obtained, how many drug test results have been returned, how many new hires have received gaming licenses, and so on. These are critical details which, if not properly administered, can delay the process and add unnecessary days and weeks to the time when a department manager has promised to let an applicant know if he or she gets the job.

Some thought should be given to the needs of employees after opening. New employees want to know about their schedule, their days off, where to park, where and when to pickup their uniforms, where and when to eat, how many hours of work to expect during the days immediately preceding and following the opening, how much overtime to expect, etc. They will want to know the procedure for changing shifts, the proper way to request an extra day off, the criteria used to assign or change work stations, the requirements for being considered for a promotion to the next higher level position in the department, the procedure for assigning vacation schedules, the procedure for determining lottery numbers, and how such numbers will be used by management. Procedures regarding handling of shortages and overages, or for documenting attendance and punctuality situations, are also important to a new employee. Some department managers unknowingly lose an opportunity to demonstrate their respect for employees' personal lives when they are unwilling or unable to clearly respond to employee questions about schedules and days off during the weeks prior to opening

Rick Cook, Director of Slot Operations for Gaming Corporation of America in Minneapolis, Minnesota noted:

"Don't take the slightest thing for granted. In new jurisdictions where the basics aren't known, you are caught by surprise when an employee says 'where do I put my purse?' You haven't even thought about it. In established casinos in Nevada or New Jersey, we are used to having our supervisors handle these employee needs. Now we have supervisors who don't know the question or the answer."

In the casino business, the location of employee purses and coats in relation to the storage of currency is a consideration. And it is relatively easy to find the answer. But when you consider the number of easy questions that require an answer, management's time begins to mount up.

How can casinos insure that managers and supervisors are effective in anticipating the needs of employees? Obvious as it may seem, this is a logical place for employee involvement. Ask the front-line employees on the staff what their needs are. Visit other casino operations and ask front-line employees what their needs were at the time of opening. Listen to applicants from other casinos talk about the work environment in their current place of employment. Consider assigning the department training coordinator to serve as liaison between employees and management during the time immediately preceding and following the casino opening in matters dealing with employee comfort and services. In discussions about floor layout and design, management should always review its impact on employee travel time and the locations of employee services, the time clock, the employee cafeteria and wardrobe, as well as overtime guidelines, paycheck distribution, employee parking and rest rooms. Management should make a commitment to the basic needs of employees early in the development process of the new operation since this deserves as much time as the floor layout, restaurant offerings, and other product decisions.

The MGM slot management team took responsibility for identifying and responding to the needs of its employees at every step of the process. Identified steps included: the day an applicant made out an employment application at the MGM's Hiring Center, the initial interview, the official offer of employment (including shift, days off, and scheduled hours of work), invitations to tour the property during construction stage, classroom training, and rehearsal conducted for the final three days prior to opening. In each step, supervisory staffs were equipped to respond to every employee question. Hommel believed it was the job of his management team to take care of the employees.

For example, every new employee was told, "If you don't understand any part of the processing and training schedule, please call us back. If you have any questions about your work schedule or your days off, please call us back. If you are not sure whereto park, call us back. Someone will always be here to help you." The phone rang off the hook in the Slot Office during the final 30 days prior to opening. After opening, employees widely indicated that they felt the Slot Office was responsive to them and their needs.

Certainly, the MGM had an impressive Human Resources recruiting, communication, and benefits package all designed to attract and retain the best talent available in the industry. But if an applicant was left waiting in the interview lobby for more than 30minutes beyond his or her scheduled interview time with a slot director, Hommel wanted to know why. He wanted employees treated the way he would expect to be treated. He knew the best benefits package needed to be accompanied by fair and respectful treatment of prospective employees. Scheduling, shift assignment and days off were among of the first questions a new employee had for management. These answers were provided at the time the job offer was extended.

Considerable time and effort was spent helping employees learn their way around the property. In each slot carousel was placed a "you are here…" map showing casino restaurants, showrooms, restrooms, hotel lobby, elevators, etc. To help employees and supervisors get used to the work area, the MGM slot directors also made a conscious decision not to re-schedule or rotate people from one section of the casino to another during the first few weeks after opening.

How much does it cost to provide responsive human resource systems? Unfortunately, the labor component of the gaming business is still considered an expense, not an asset. Dean Macomber of the Navegante Group observed:

"I know what percentage of total revenue to spend on marketing during the pre-opening phase. It is usually two to six percent. But I would like to know the industry average for a human resources budget during the pre-opening phase. We know it is a critically important component to a successful opening, but we need to become more sophisticated in our tracking systems to know the amount of money to allocate for the human resources side of the business."

Management in a start-up environment needs to remember not to take the slightest thing for granted. They should remember back to the days when they were a front-line employee beginning their first job. Employees should be provided with as much information, as much support, and as many resources as needed to help them become comfortable with the new job, the new company, and the new supervisors. Doing so will result in self-assured, productive employees who treat customers better, and who are more likely to project a positive image to customers. The added benefit of higher retention rates may also translate to bottom line financial rewards as well.

Inaccurate Staffing Levels

Casino companies spend considerable time, money, and energy introducing their new properties to their respective communities. The messages to prospective employees during the recruiting efforts include "we care about you," "we will train you," and "we will provide you with career opportunities." Over-staffing and the resulting lay-offs that typically follow casino openings can do considerable damage to the good citizen reputation the company is trying to establish. On the other hand, under-staffing may frustrate both employees and customers, causing them to look for a different place to work or a better place to play.

Inaccurate staffing levels also affect the recruitment of new employees. They are sometimes justifiably skeptical about joining a new venture since there may be a risk of being laid off. It is a common practice to over-hire by 10% in the expectation that there will be some employees who just won't like the work, won't be able to do the work, or won't realize what weekend or holiday work really is like until they experience it. Identifying the proper staffing level is always a challenge during an opening.

Staffing level decisions cannot be made in a vacuum. In a related discussion, Wirshing noted:

"It helps when the same manager who developed the staffing plan is the manager who opens and operates the property. Many assumptions are made about staffing levels that get lost in the shuffle when new people assume responsibility for managing an operation they did not develop."

Management should look at industry averages to help guide their recommendations, e.g. the ratio of slot supervisors or slot employees to the number of machines. Management should study recent openings to learn the impact of new technologies on staffing, such as the time and labor saved by computer systems that pinpoint employee access to machines. They must be realistic about the floor layout and customer expectations for service by recognizing that such things as a compact, well-defined area in a high traffic zone may require more staffing than average to properly service customers. Or since the high limit slot section always requires additional staffing, management should look for ways employees in other sections can cover the area when the regularly scheduled staff is on break. They should look at the floor coverage required by their procedures and consider travel time for the supervisor who has to approve all fills and jackpots over a certain dollar level.

Author Charles Handy presents a concept the gaming industry might consider (Handy1989). It involves hiring a pool of core (permanent) staff members and a pool of flexible (temporary, part time, or "on call") staff members. Benefit packages could be designed which meet the needs of the flexible staffers, and also give them the freedom to work fewer hours during non-peak times, to take unpaid leaves of absence more often, or use their casino jobs as a part-time positions to supplement other employment. In addition, these flexible staff members could be provided enough status and privileges (i.e., paid holidays and sick leave entitlement) to make such positions attractive.

Another staffing problem in a pre-opening environment deals with staffing shortages. In some markets, especially those with more than one casino facility being opened in a short period of time, there might not be enough qualified applicants. Some people will accept more than one job offer and wait until the last minute to decide which job to take. Some are "just looking" and do not intend to accept a job offer made to them. Others are trying to improve their current job situation by considering employment at the new property.

Too often, the crush of management activities and decisions to be made during the two weeks prior to an opening does not leave time for a careful review of staffing levels. It is always prudent to have a back-up hiring plan for the 10% to 15% of front-line applicants who do not begin work as they had promised. It is conceivable that a department supervisor will have to spend the last 48 hours prior to opening and the 48 hours immediately following a casino opening interviewing candidates, extending job offers, and adjusting work schedules accordingly to allow for constantly changing staffing needs.

In anticipation of problems that would be caused by over-hiring, the MGM slot team tried to hire a more realistic number of employees and to tell them they would be working ten to twelve hour days with no days off during the first few weeks of opening. They also hired multi-experienced employees who could be moved to other assignments within the slots department if staffing levels required. Within 90 days of opening, approximately 60 slot employees had transferred to other slot department positions.

During the first few days of the operation, Hommel named a "swat team" which consisted of managers and key employees who would assist the slot operations directors on designated shifts with trouble-shooting as needed. These employees worked their regularly scheduled shifts, then remained at work for an additional four hours to work on the swat team. This also eliminated the need to over-hire in key supervisory positions. Because of this approach, no changes were made in the supervisory staffing level after opening.

Various forms of technology also affect staffing. One example at the MGM was the use of bill acceptors on every slot machine. It was not at all clear prior to opening how many change people would be needed in any given slot section, or how bill acceptors would affect the job duties of the floor person position. After opening, the number of employees actually needed to staff the slot department totaled 425, down from an original estimate of 500. Only 15 slot employees were transferred to the property-wide employment pool created to fill existing vacancies in other departments. (Of the original 500 employees 60were laid off.)

Determining appropriate staffing levels is a dynamic process. It influences and is influenced by so many other aspects of the operation that it deserves considerable management attention. Because labor is such a costly item in a casino operation's budget, systematic reviews should be conducted throughout the planning process to insure that early estimates are still valid. Management should engage in discussions to research all possible solutions to staffing questions and be prepared to adjust numbers accordingly. Establishing an employment pool of employees who are placed on reassignment status is an effective way to maximize the investment already made in recruiting and training new employees. In many cases, a staffing overage for one department can be a resource to departments with staffing shortages.

Failing to Communicate Clear and Realistic Expectations

In a start-up environment, management's communication with new employees regarding job requirements and performance expectations is normally accomplished through training and communication programs and inter-department procedure review sessions.

1. Training and Communication

   Frequent and effective communication and training during an opening cannot be over-emphasized. Even in an environment where many of the employees are familiar with the gaming industry, they are probably not familiar with the nuances of each particular casino. In addition, the communication priority is even more important when hiring managers in new jurisdictions with no casino experience. It is important to take the necessary time to explain what the casino expects of non-casino (i.e., food and beverage, security, hotel, marketing) managers. For managers and supervisors who have never worked in the gaming industry, management's message is the only way staffers can learn what is expected of them in such a new environment and in such a short period of time.

   Managers and supervisors also need a clear understanding of the culture of the company, the operating procedures and guidelines, and the expectations senior management and owners have of them. Their involvement in team building activities, planning sessions, and logistical set-ups for the casino are critical. If management is able to repeatedly articulate the vision of the company and the competitive advantages of the property and its characteristics, it will help front-line employees to better understand the importance of their roles and to better understand the training they are receiving to help them perform satisfactorily.

   Training occurs in a number of ways. Employees are exposed to training in formal training programs, in discussions and meetings with management, during work sessions which develop operating policies and procedures, during pre-opening tours and pep rallies, and during all activities which make up the last two to four weeks prior to opening.

   The training curriculum should include the company's commitment to customers and service, and the property's unique product and service offerings which will provide a competitive advantage in the market. In addition, a description of how the department fits into the property organization is helpful. Finally, management's expectations of the job for which the employee was hired, and the presentation of opportunities to develop skills for responding to on-the-job situations which require the employee to use good judgment when dealing with customers or fellow workers are critical training objectives.

   For the front-line employee in a start-up, training is not always a very interactive process, although it should be. Employees are new to each other and the company is new to all of them. Many times, employees are more anxious to know how management expects them to complete tasks than they are to practice scenarios that may evolve on the casino floor. Some employees are concerned they will give the "wrong" answer during training and this will adversely affect management's opinion of them. There can and should be discussion about the proper way to handle a disgruntled customer, but it should be within the context of company policy. To encourage discussion, trainers should ask new employees to relate experiences they have had as a customer or in customer service situations on a previous job. This gives employees a chance to share their experiences and to practice responses, but training discussions should conclude with a clear restatement of management's expectations.

   Whose job is it to train new employees at every level of the organization? It is the responsibility of each operating manager. The human resource department usually coordinates this effort and provides direction and guidance to the management team regarding appropriate and effective training programs. They might access resources including training companies, training consultants, and the in-house training department staff to insure employees are provided with the necessary information to perform their jobs in a consistent and correct manner. Using department supervisors to conduct the training has the added advantage of insuring the supervisor understands department policies and procedures well enough to explain them and to respond to employee questions.

   Providing effective supervisory training is especially important because, with the expansion of gaming into new jurisdictions, supervisors and managers are being hired who have responsibility for a gaming area, but have never worked in a casino before. Ann Reynolds, a casino shift manager at Ameristar Vicksburg, in Mississippi, noted: "I was one of the skeptical managers about hiring pit supervisors who had never dealt one hand to the public. Every single person we promoted directly from dealer school to supervisor has worked out well! We are all pleased with their progress."

    

2. Inter-Departmental Procedure Review

   Clearly, there needs to be one set of procedures before training can be effective at the front-line. It is amazing how much valuable management time can be spent in discussions about procedures and the "proper" way to do a job or perform a task. In an organization where many of the supervisors came from different casinos with different procedures and different cultures, these discussions can last for hours and days. To keep these discussions from becoming unwieldy and unproductive, the leadership of the property must get involved, focus the discussions and clarify questions early so valuable time is not lost.

   The operating managers and supervisors should prepare procedures early enough so that training materials can be prepared to describe and support them. At the same time, this is also an opportunity to review the company's commitment to customers and employees. Do the procedures make it easy for the staff to provide quality customer service? Or do the procedures tie the hands of the service providers and take time away from getting a customer back into action?

   Procedure review sessions also become an important part of training and communication. Be sure internal controls are finalized well in advance of these discussions. Once the operating procedures have been finalized, it is critical to conduct a series of discussions among related department supervisors about the procedures. For example, cage, security, pit, slot, surveillance, and other operational supervisors should be brought together with the director of operations. They should systematically discuss each of the procedures which require inter-departmental action such as making table and slot fills, extending credit, making jackpot payoffs, closing and opening pit games, conducting the pit and slot drops, paying back markers, comping players to restaurants or shows, putting players into the tracking system, etc. The supervisors should be asked to describe for the group in detail how they and their appropriate employees would handle each situation. Observations should then be solicited from the other supervisors about the task being discussed.

   Differences of opinion regarding operating procedures will be identified, and through discussion, the most effective method of accomplishing the task can be determined. Any conflicting issues that arise should be clarified right away; this should also reaffirm the importance of inter-department cooperation and teamwork. Since all departments are involved in resolving the potential problem, all parties affected by the procedure will understand the intent of management and the best way to execute the procedure. Not only will this approach guarantee a smoother opening; it will also help teach supervisors that senior management wants to provide hassle-free service to employees as well as customers. It may even form the basis for similar discussions in the future. Reviewing procedures on a regular basis breaks down barriers to effective communication and helps departments work better together.

   At the MGM, Andy Hommel believed training was his responsibility and one he shared with every slot director, manager, and supervisor. Therefore, he reserved time and money to train each supervisor to be a trainer (22 of 30 actually conducted pre-opening classes). Team building activities were incorporated into the pre-opening management discussions about procedures, operating guidelines, and employee relations. Hommel continually encouraged the management team to discuss the "soft" side of the business, the people managing guidelines, which can quickly become inconsistent and confusing to employees once the doors are open. He knew these discussions would be referenced again after opening when it was noticed that one shift was enforcing a certain procedure in a different manner than the other two shifts. He wanted to avoid such problems from the outset.

   Hommel opened every training class with the statement: "We are glad you chose us." He set the tone and the example for the supervisors (trainers) by telling the front-line employees how important they were to the success of the property. Since many of the slot supervisors were more experienced in slot operations than in public speaking, many of them were uncomfortable with conducting a training class. Every supervisor attended the "Train the Trainer" sessions provided by the MGM and The Perkins Corporation. Teams of supervisors were then assigned to conduct each class (24 eight-hour classes were scheduled during the ten days immediately prior to opening). At no time was a supervisor asked to conduct a class alone. In all cases, there was someone else in the room to assist as a co-facilitator.

   After opening, several of the supervisors commented that the best part of the training for them was learning it was comfortable and appropriate to say, "I'm not sure, let me check." They found that front-line employees appreciated the correct response as compared to an overly confident supervisor who made up the answer in order to save face. The supervisors also carefully studied operating procedures prior to the training class so they could properly explain them to front-line team members. They spent considerable time discussing among themselves the exceptions to each procedure so they could be clear on all possible situations an employee might encounter.

   At the MGM, we introduced a technique called "Andy's 20 Questions." Every employee was told that Andy Hommel had a special way of communicating with his team. He asked a lot of questions. Many times, they were questions with obvious answers. But he asked them nonetheless. In this manner, employees were prepared from early in the training to be comfortable with questions from Hommel or any other senior manager at the MGM. They learned it was the job of each employee to know the answer. Quiz sessions were built into the training sessions to reference the 20 Questions and rehearse the proper response. We also reminded the team that Hommel used this technique to be sure the front-line was receiving the most current and most correct information from the supervisors. Best of all, the customer received consistent responses from every slot employee.

   After opening, the MGM slot management team recognized that the inter-department procedure review sessions represented an area where "we forgot to do training." Even though the slot operations staff knew about procedures, drop times, and various other services to be provided by the various departments in the organization, not enough time was spent in discussions among other department supervisors to uncover possible problems. "We thought they were telling their employees the same things we were telling our employees," Hommel said of the Cage function. "If I had it to do over, I would focus more time on the inter-department procedure review."

   During the last few days prior to opening, every slot employee was scheduled to work their assigned shift, in their assigned location, with their assigned supervisor. This dress rehearsal -- they wore red MGM logo tee shirts to help them identify fellow slot employees across the casino -- was designed to give slot employees a chance to prepare their work stations, practice procedures, and familiarize themselves with the property and machines located near their work stations. A checklist of 50 procedures and specific job duties was provided for each employee to use as a guide during rehearsal. We believe it helped employees feel comfortable about their new job and their new work station. This also helped them have more time to devote to responding to customer questions and providing the level of service for which the MGM has become known.

   In every casino operation, existing or start-up, better communication needs to be a management priority. Staff departments should not manage this process; rather, it should be an important part of every senior manager's job duties. It is also a continuing process. The advantages of strong focus on training and communication from the outset include building an expectation on the part of front-line employees and supervisors about management's commitment to keeping them informed.

   Finally, it is critically important to let employees know what opening day will be like. Time should be spent acquainting employees with the stressful conditions that will exist once the property opens. Employees should be made aware of the crush of customers and the volume of money and transactions that will have to be handled accurately and efficiently during that busy time. Employees will need help understanding the priorities of the opening. They should also be reassured that the levels of intensity will diminish after the first few days or weeks.

Lack of Attention to Managing Transitions

Management needs to be responsive to the various transitions which occur prior to, during, and immediately following the opening of a new property. A few of these transitions will be discussed here:

• the transition from construction to operation;
• the transition from installation to operation of new technology; and
• the transition from training in a mock casino environment to responding to real customers.

1. Transition from Construction to Operation.

   In most companies, construction workers are hired locally and are part of a separate company that will not be present after the property has been opened. While construction management tasks are different from those of casino operations managers and supervisors, there are also similarities. Adhering to timelines is critical; approval processes must be known to all involved; changes in construction work orders require clarity and specific management attention.

   There are also good reasons for both areas to be respectful of the other's responsibilities. The communication lines must be open and possible breakdowns in the schedule must be known to all parties in enough time to react properly. Every casino executive has stories to tell about the last few days prior to opening: "It won't be done on time." "There is no way we can make it." "The electrical outlets are nowhere near where they are supposed to be." "The casino guys didn't decide until the last minute they wanted that sign in that location." "It is a good thing I went to the design meeting when I did, or the surveillance cameras would have been blocked." The examples go on and on.

   Dual Cooper, former Chief Operating Officer of Casino Magic, noted the most important "people consideration" in a start-up is the communication that must occur between the construction design team and the operations team. But, he said: "Too often, the designers don't bring the operators in to look at the blueprints and ask how it will work after it is built."

   Simply communicating well can improve the transition considerably. Ideally, a construction project manager has been identified to manage this transition and knows where the potential problems are from an operating standpoint. This person usually remains on staff as the facilities director after the property is open. Another option is to designate a coordinator to represent the operations managers during the transition. For example, this person could check the actual work space and counter design after all the equipment has been installed. Somehow, the space on the casino floor always looks different than it did in the blueprint. Examples might include:

   There is not enough room between machines! There is no place to stack cups! The change banks block a customer's view of the machines or the section! These aisles are too wide! Those aisles are not wide enough!

   It is important for the operating manager to make no assumptions. The manager should check and double check everything that is needed to ensure a smooth transition, a smooth opening, and an efficient operation.

    

2. Transition from Installation to Operation of New Technology

   In start-ups, the dependence on the correct operation of computers, player tracking systems, point of sale cash registers, slot analysis programs, and various financial analysis programs is considerable. With every opening, there is new technology or a new twist on existing systems. Sufficient lead time must be allocated for the hardware and software to be installed, tested, and used prior to opening. It must be operable, not just ready to be used. Passwords should be distributed in time to allow employees to have an opportunity to become familiar with the equipment. In the cases where new technology is being introduced, the target date for installation must allow adequate time for training and testing. The transition from the vendor (or in-house MIS department) to the user will require management's attention and concentration to insure the systems function as described and to insure employees know how to handle the software and equipment.

   Too often, discussions regarding new technology are strategic in nature and held between director or vice president level managers. The tactical problems are not heard in the boardroom. Assigning a supervisor to work closely with the vendor on new system installation will help insure that the tactical aspects of the installation are addressed, and should provide for a smooth transition.

    

3. Transition from Training in a Mock Casino Environment to Responding to Real Customers

   Since most properties conduct the majority of the training during the last three to five days prior to opening, doing so on the casino floor has significant advantages. Ideally, some training and orientation will have been conducted earlier in the seven days immediately preceding opening which introduces employees to the company and its operating philosophies. Because management's attention during the last two or three days is often diverted to handling other pressing issues which arise at the last minute, employees may be seen standing around in small groups, reviewing training manuals, becoming familiar with the property, or otherwise unproductively attempting to train themselves. The precious few hours before actual opening can be utilized much more effectively by implementing the "Mock Casino" concept developed in Atlantic City to simulate employee-to-customer and employee-to-employee transactions on the casino floor.

   The Mock Casino gives employees a chance to practice procedures just as they are to be executed when the casino opens its doors to the public. It is important to make these sessions as realistic as possible by conducting the Mock Casino during the employees' actual working hours: asking employees to wear uniforms for at least one of the days, asking employees to assume the role of the customer for periods of time during the shift, providing employees with customer scenarios to enact during the shift, serving mock cocktails to players, using the overhead pager and beeper systems.

   Specifically, it is helpful to perform department functions which require interaction with employees from other areas. For example, managers should conduct several dry runs of the drop and the count and keep track of the time it takes to complete each. A Security Officer should be asked to accompany every supervisor making a fill. There should be enough play money and forms on the floor so that each employee can count down his or her bank and have it verified. This is an opportunity for them to practice counting and re-counting money. Mock customers can cash in chips and coin.

   It is also an opportunity to practice procedures that involve employees from another department. Even though procedures have been written and approved by upper management, it may become obvious that they need modification in actual casino situations. Becoming fast and accurate in handling money during a training exercise is far different from handling huge volumes of cash on opening day. Employees cannot practice enough in the areas that involve the proper handling of money, the movement of money throughout the casino, and the documenting of money through the proper paper trail. Employees should be timed in opening and closing a game or counting down banks at the end of a shift. Progress should be evaluated from shift to shift.

   Many gaming commissions provide summary memoranda which outline problems experienced in their jurisdictions during previous openings. This information should be shared with supervisors and used guide de-briefing sessions during the Mock Casino.

   In most openings, much of the activity during the two to three days prior to opening is directed at finishing the property and making it ready to receive customers. Are there enough keys and locks? When will the keys be distributed to employees? Do the telephones, beepers, radios, and public address systems work? Money has to be placed on the floor, last minute construction tasks must be completed, missing supplies and equipment must be located. Is there enough money on the floor and in what denominations? Where can someone get more if an emergency fill is needed? How long will it take? Will the Cage be able to serve customers as well as employees from another department on a timely basis? Coordinating these operational priorities with the activities of the Mock Casino will help identify problem areas prior to opening day.

   Andy Hommel became the designated transition project manager for the slot department during the last 30 days of construction. He spent considerable hours on the casino floor monitoring the progress of the various construction staffers. His priority was managing the slot technician component of the department efficiently and cost effectively so that every machine was tested and operable by opening day. They missed by ten percent; the coin free machines in the casino were not in operation until several days after opening.

   The MGM opened with a variety of new products and concepts: 356 of its slot machines were coin free, bill acceptors were installed on every machine, and customers were promised "one stop shopping" which would reduce the number of times their calls for service would be transferred to another number. These new systems were a major part of the training effort, and each employee was introduced to the manual back-up system as well as the new technology. As it happened, the player tracking system was not on line at the time of opening, so it became increasingly important for each slot employee to become acquainted with frequent players and develop short-cuts for providing special services to those whose play warranted it. Also, the slot information system and related jackpot and fill triggers had to be accessed manually.

   The MGM Grand opened three and a half months ahead of schedule and considerably under budget. Some of the problems created by that accelerated schedule were documented publicly. Six months after opening, announcements were made by the company stating first quarter revenues were considerably ahead of projections and continued efforts were being made to align expenses with industry operating standards.

   Experienced start-up managers appreciate the importance of managing the transitions discussed above. The period of time immediately before and after the opening will challenge even the best of managers. All the discussions about what will happen when the doors open come to a halt on opening day. It is time to see whether the leadership is ready, whether employee needs have been met, whether the staffing levels are accurate, whether the opportunities for training and communication were effectively used, and whether the transition from planning to doing can be executed smoothly.

Conclusions

Successfully opening a new casino depends in large part on the ability of a company's leadership and staff to respond to a multitude of human resource challenges. Developing an organizational strategy can be as important as selecting the site or choosing an architect. This must become a major organizational focus. This article has concentrated on the importance of experienced leadership in providing for the basic needs of employees, communicating realistic expectations of management to employees, accurately projecting staffing levels, and managing the variety of transitions which occur during an opening.

Recruiting the right people to develop and execute a pre-opening strategy for a new casino property is probably the most important task a senior management team faces in ensuring a smooth transition from the planning stage through to a successful opening. The leadership must be knowledgeable about the customer, about the market, about the competition, about new technology, and about effective ways to utilize its human resources component. Where to locate, how to identify, and what compensation and benefits package to offer to successfully recruit these executives are questions which must be answered early in the start-up process. Then executive energy must be expended to properly motivate these individuals to sell their needs to upper management and to operate within the financial and margin parameters established for the property.

Once hired, the pre-opening team must be able to work together in developing a plan that will produce quality products and services provided by employees who are capable and enthused about their role in delivering the product. The company's human resource philosophy shapes this effort since it expresses the company's values regarding its employees. Paying attention to the basic needs of employees and providing clear and consistent expectations for employees are management responsibilities which are critical during pre-opening but also continue after opening. The focus may shift somewhat, and the operating managers will often assume greater responsibility for anticipating and responding to the needs of employees, but being attentive to employees should remain apriority. Developing systems to accurately track employment applications, interviews, reference checks, drug tests, and security clearances will form the foundation of communication with prospective employees about the status of their job requests. Training and communication programs during the pre-opening phase will focus on how and where employees fit into the company's service strategy and what is expected of employees on the job. These programs will usually expand considerably once the property is open to include a more in-depth discussion of the company's policies and procedures and additional skill training in the proper handling of customer situations.

Staffing levels are often dictated by pre-opening budgets which are usually prepared years in advance of the actual casino opening. Contingency funds are sometimes not sufficient to handle unforeseen expenses. There is always pressure to open under budget and some sacrifices are usually made. After opening, it becomes necessary to adjust and ensure that additional expenditures are still worthwhile. It may also become important to restate the property's vision and mission as it relates to the capital and staffing expenditures which are now required.

The ability of a senior executive to manage transitions receives little attention in the gaming industry. Yet considerable skill and experience are required to develop the proper organization structure to achieve the company's objectives and to see the big picture when managing all functions within the organization. Even though senior level executives have experience in openings or in managing operations of significant size, they often hire less experienced subordinates. It becomes critical for the senior executive to instinctively know the amount of direction required by a director or manager to complete an assigned task. It may be appropriate to allow subordinates the autonomy and authority to carry out their responsibilities, but the executive must stay close enough to the process to be able to intercept potential obstacles before they become major problems.

Senior managers must be able to see the property's future and continually communicate it to their management team. Companies that develop an organizational strategy, which emphasizes the human resources component, will have smoother openings and will also create a competitive advantage.

REFERENCES

Cook, Rick, Director of Slots, Gaming Corporation of America, Minneapolis, MN, personal interview, March 1994.

Cooper, Dual, Chief Operating Officer, Casino Magic Corporation, Bay St. Louis, Mississippi, personal interview, April 1994.

Falcon, Israel, Vice President of Gaming, Ameristar Corporation, Vicksburg, Mississippi, personal interviews, January -- April 1994.

Fromm, Bill and Leonard A. Schlesinger (1994). The Real Heroes of Business…and Not a CEO Among Them. World Class Frontline Service Workers: How do you find them? Train them? Manage them? Retain them? New York: Currency/Doubleday.

Handy, Charles (1989), "The Shamrock Organization," The Age of Unreason: Cambridge: Harvard Business School Press.

Hommel, Andrew, Vice President of Slot Operations and Marketing, MGM Grand Hotel, Casino and Theme Park, Las Vegas, Nevada, personal interviews, July,1993 -- April, 1994.

Hunter, David, Director of Slots, Binion's Horseshoe, Las Vegas, personal interview, April 1994.

Kenny, Michael, General Manager, The President Casino at Biloxi, Biloxi, Mississippi, personal interview, April, 1994.

Mitchell, James, Vice President of Human Resources, Biloxi Grand Casino, Biloxi, Mississippi, personal interview, April, 1994.

O'Donnell, Thomas, General Manager, Turning Stone Casino, Oneida, New York, personal interview, March 1994.

Reynolds, Ann, Shift Manager, Ameristar Casino Vicksburg, Vicksburg, Mississippi, personal interview, April 1994.

Spencer, Lyle and Spencer, Signe (1994). "Competence at Work."

Ulrich, David (1989), "Shared Mindset," Personnel Administrator, November.

Wirshing, David, President and COO, Fitzgerald Gaming Corporation, interview, March 1994.

Woolf, Larry, Chairman, President and CEO, MGM Grand Hotel, Casino and Theme Park, interviews, July, 1993 -- May, 1994.

Yeager, Charles, General Manager, Biloxi Grand Casino, Biloxi, Mississippi, interview, April 1994.

©1999 Eadington, W.R. and J.A. Cornelius (eds.). The Business of Gaming: Economic and Management Issues. Reno: Institute for the Study of Gambling and Commercial Gaming, University of Nevada.

*Mary Ann Perkins is a consultant to several international gaming companies. She is the owner of The Perkins Corporation, Reno, NV.