IHG: Outperforming when centralising and consolidating… through communications

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DISTRICT LINE — In it’s statement to the market yesterday the InterContinental Hotels Group pointed out that it outperformed its peers and achieving substantial savings by centralising functions such as procurement.

This is the kind of story that does not often make the front pages of newspapers, but most of our clients are making some kind of change. As the Able and How MD Paul Arnold says:

“In good times it’s all about expansion. Businesses try to buy other businesses to increase their revenues and profits. However, when markets are tougher businesses go into consolidation mode, and it’s all about taking out cost and centralising as much as possible.”

So, congratulations to InterContinental. Their efforts have paid off. They have managed to bring together disparate parts and get their own house in order in ways that others have not. And now they are reaping the rewards of that.

But it’s not as simple as that, is it? Do other businesses simply not try to bring together their HR capabilities or outsource their IT? Do they decide to continue to waste money where savings can be made?

No. Others try. From what we can see, everyone tries. We’ve not yet met a business that doesn’t have some kind of integration plan going on.

As we know, unfortunately, about 70% of change programmes fail. And the reasons for failure are also clear. There is not enough attention paid to communication, vision and leadership involvement. We have worked on programmes at great big companies where consolidation… integration… transformation is under way. And it never ceases to amaze the extent to which communication and change management skills are the difference between success and failure.

I wonder what the InterContinental Group would say?

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