Latest exec shake up leaves Carlson ‘flat’

MINNEAPOLIS—Intent on becoming a flatter, more agile organization, Carlson Hotels Worldwide has put forth a new three-year strategic plan that was accompanied by yet another realignment of key personnel within the company. The latest organizational shift represents the second significant shake up and third realignment of sorts within the calendar year for the privately held company and included the elimination of a number of jobs. It also represents the first major initiative by new president and CEO Hubert Joly, who took over the reins of Carlson Cos. in March when he replaced former chairman and CEO Marilyn Carlson Nelson, who remains the company’s chairman of the board. Carlson veteran Nancy Johnson, who was named executive vp and chief development officer for all Carlson hotel brands in the Americas in the recent spate of moves, touted the benefits of the new structure. “It’s a much flatter organization. One of Hubert’s philosophies is to maintain flatness. He saw an opportunity for us to be more agile,” she said. As part of that effort to become flatter, several key Carlson executives had their positions eliminated, including Paul Kirwin, who was named president and managing director of the Americas as part of the first restructuring earlier this year. Also seeing their positions eliminated were Bill Sipple and John Sturgess, who were both promoted on the development side a few short months ago. In April, Sipple was named corporate vp of development with responsibility for the company’s owned and managed portfolio, while Sturgess was named vp of corporate franchising development. The linchpins of the company’s new Americas strategy are its two largest brands, Radisson and Country Inn & Suites. The Radisson and Country Inn operating companies will each include their own teams for the function of marketing, sales, hotel management, franchise field support, brand standards, guest satisfaction plus product and service quality. In addition, Carlson’s Park Inn brand will be supported through the Country Inn operating company. Brand new leadership As part of the new alignment Fredrik Korallus now leads the Radisson brand as executive vp and COO of Radisson Hotels & Resorts—The Americas. Korallus had been executive vp of revenue generation. In addition, Wendy Nelson, executive vp of Carlson Hotels Real Estate Co., has been named to a new position of executive vp of Radisson brand strategy for Carlson Hotels Worldwide. Steve Mogck, who had been executive vp of franchise operations for select-service hotels, was named executive vp and COO of Country Inn & Suites By Carlson—The Americas. Johnson, meanwhile—who has held a host of titles in her nearly 20 years with the company—most recently was more focused on the operations side as executive vp of franchise operations for full-service hotels and franchise development. However, she said she welcomes the opportunity to return to the development side of the business. “There’s a lot of opportunity. It’s exciting to be back in development,” she said. Johnson, as well as Korallus and Mogck, all report directly to Jay Witzel, who remains president and CEO of Carlson Hotels Worldwide. Also as part of the changes, Bob Kleinschmidt, executive vp and CFO, has taken on additional responsibilities as chief administrative officer and is now responsible for the areas of finance, legal, operational support services, technical services and procurement. Paula Winkler, chief information officer, has been named executive vp and has taken on additional responsibilities for operational support services, including the areas of information technology, distribution, revenue optimization, loyalty programs, training, education and development plus property support services. Previously, the company—which is preparing to open its 1,000th property this month with the Radisson in St. Maarten—had been structured around its full-service and select-service hotel brands. And most recently its development arm had been broken up between franchised hotels and the company’s owned and managed portfolio. Johnson said that while the company remains focused on growing its owned and managed portfolio, which consists of approximately 30 hotels, the new alignment makes more sense. “Managed hotels fall right under the brands now. It’s much more synergistic,” she said, adding the company is looking to expand its owned and managed collection primarily in top 25 markets and is “focused on geographic clusters.” Johnson noted that the development pipeline for the Radisson brand is, not surprisingly, down slightly and the Country Inn brand is approximately 10% off its previous pace. However, she sees significant opportunity for both brands to boost their numbers in the next couple of years, particularly as conversion opportunities become available via refinancings. Opportunities abound “For the next two years there will be great opportunities. Anybody who couldn’t finance a hotel in the last three years will be forced to sell. Independents will be forced [by lenders]to get a brand,” Johnson said. As for Carlson’s three other brands—Regent, Park Inns and Park Plaza—Johnson noted that the company remains committed to growing Regent and Park Inns where it makes sense, but has put the growth of Park Plaza on the back burner for now, at least domestically. The Park Plaza brand has significantly more distribution overseas, according to Johnson. Johnson was quick to point out that while the current economic conditions accelerated the “flattening” of the company, this plan was presented to the company’s board of directors as early as last June and was ultimately approved in September. It was all a part of Joly’s vision for future growth. Johnson added that the board of directors for Carlson Cos., which includes the company’s Carlson Wagonlit Travel as well as its restaurant and cruise business, has put an emphasis on Carlson Hotels Worldwide. “When Hubert first took over in March he identified the need for quantum leap growth,” she said. Johnson confirmed that the company’s culture has changed slightly under Joly, but expressed confidence in the latest moves. “Anytime a new leader comes in, he puts his stamp on the company,” she said. “But [Joly] is a disciplined individual who makes decisions based on facts.”