Gary Loveman and Harrah’s Entertainment

Gary Loveman, a former professor from Harvard University led Harrahs through a transition to a more marketing-focused company and help the company break out of a financial performance plateau. As one of many initiatives to expand their customer engagement, Gary (along with the previous COO) developed a customer loyalty program called Total Gold, modeled after the airline mileage reward program to provide incentives for loyal clienteles. As CEO, Loveman has concentrated on attracting average gamblers to Harrah's casinos with a direct mail marketing and customer loyalty program, Total Rewards, instead of targeting only high rollers or creating family friendly attractions. His strategy makes gaming, rather than hotels, performance venues or other associated ventures, responsible for the vast majority of Harrah's revenues.

Gary was selected over Sergio Zyman (CEO ofCoca-Cola) on the basis that he had a previous history of working with the company. He understood the culture, worked on-site, maintained high understanding of the dynamics of customers and didn’t have an ivory-tower mentality towards consumers. Satre’s decision to hire Gary was his alone. He didn’t consult his stance with other senior executives or his board of directors. He avoided Group Think. Most people within the organization would probably consider Gary to be inexperienced in management especially with his background more focused on academia. Gary was an unconventional choice for COO, one that might’ve been against a risk adverse decision, but nonetheless, a wise one. Many wondered if Gary would be successful in leading the operation with no practical experience

Gary gained credibility and confidence among his colleagues immediately. He had a perception that his job was not to over-manage people who were experts in their areas of specialization. He had the notion that his job was to provide direction, confidence, and intellectual horsepower to assist the company to move faster and effectively towards its strategic goal. He won over his colleagues by making himself more readily available to people aside from the higher up general managers, but to employees in all areas within the organization. He was personable and interactive and reversed the ideal that the CEO is unreachable to employees occupying the low positions. Good communication tactic. Gary also established a great incentive plan that recognized employees when they reached their goals and offered positive reinforcements in the form of added bonuses to continuously motivate workers to strive for the next level.

General culture shift occurred when Gary infused Harrah’s with a sense of focusing on high-impact efforts by limiting unnecessary agenda (update website) and reducing the scope of responsibilities of workers. One task Gary considered to be a secondary assignment was the revision of their website. The task didn’t contribute to the organization’s financial sector and was considered unnecessary. He did however, provided an alternative to those that were eager to work on this assignment and that was made available once all of the aforementioned areas were addressed. He realized that a loyalty strategy based on same-store sales growth was the best approach to secure their finances. From his research team, Gary realized that the company’s best customers were those that visited the casino regularly, middle class citizens that lived nearby, and that were opposite of the high rollers that the entire industry had targeted for many years. He also discovered factors that motivated these regular customers were not of free hotel rooms because most of them lived near the casinos they visited, but instead desired free casino chips as rewards.

From the preferences of the customers, Gary altered the existing rewards program into a tired system that motivated consumers to migrate up the pyramids of rewards. The tiers were purposely made to be exclusive so customers will get the idea “the more you play, the higher you go.” In an effort to target customers that fell out of touch with the company, a direct mail and phone call system was utilized to contact those that haven’t stepped into Harrah’s in the past three month. This is truly a great idea to show customers that your organization cares about their business to the company and recognizes their contributions when they’re absent.

Overall, I was really impressed with Gary’s ability to takeover and transition the company only within a few short years. He is a Socratic thinker that believes in win-win situations, not just for customers but for employees as well. Customer satisfaction is a win for the company and a win for the employees that are the front runners to make this happen.