Originally published in the August 2003 Issue of Link & Learn.

Eight months ago, the quality of succession management at Six Continents Hotels was a matter of public debate. Analysts expressed doubt about whether the Hotel Executive Committee (HEC) had what it took to run a hotel company. In November of 2002, Deutsche Bank analysts' comments focused squarely on the hotel business; "We find the extent of relative operating underperformance (in hotels especially) staggering." A few weeks later, they shot out at Six Continents Hotels, point blank: "Whether this management team will actually be given the chance to put words into deeds is another matter." And internal skepticism among the HEC echoed the analysts' sentiments.

While new CEO Richard North's immediate job was to change that perception, many factors stacked the odds against him. As Former Group Finance Director, responsible for finance, pensions, tax, treasury, corporate finance, and M&As, North was a "numbers guy" -- not the hotelier that "The City" preferred. And building a new organization would not be easy in the midst of post-9/11, the Iraqi War, a hostile take-over bid, a branding change to InterContinental Hotels Groups, and the SARS outbreak in Asia, where many of the company's flagship properties were located.

But North became a student of the business and of what would make extraordinary leaders in this business. While some members of his team believed in the 'Great Man' theory of leadership, like the mark Bill Marriott has left on his company, Richard North knew he needed a team of capable leaders to pull off the radical changes required. He also knew that without commitment at the top, the opportunities afforded by being a stand-alone hotel company would dissipate quickly.

In November 2002, North decided on a collaborative engagement with Utah-based firms 1Point0 & Company and Results-Based Leadership, Inc. to conduct an "organization review." Two factors were critical to success:

1) First, North would commit the best and brightest to review design options for the company; and
2) Second, he and HEC would act with speed and accountability on the Design Team's recommendations.

Identifying the best and brightest to populate the Design Team took a few rounds. In the past three years, the company had conducted little succession planning or assessment of leadership bench strength. When the heads of HR, Strategy, and Finance requested a list of the company's high potentials for a two month assignment, the initial list was suspect. So the search team pushed back.

First, the search team challenged the senior executive of each function to make sure the selections were truly high potentials. Next, they polled each key executive and did a force-field analysis of reasons each candidate couldn't take the assignment versus the risk to the company if they didn't take the challenge. And in selecting the final team, diversity was crucial; high potentials would be male and female, they would represent line operations and support functions, and they would have varying tenures at the company.

Lead, Follow, or Get Out of the Way

The Design Team, led by Peter Gowers, Vice President of Strategy, took the assignment very seriously. In effect, he was leading a team that had just entered a high potential leadership development program. They would not only be redesigning the company, but would also be defining key roles for the next generation of organizational leaders. The stakes were high and they had less than two months to complete the assignment.

As the recommendations of Phase I (initial design) were being drafted, Gowers and 1Point0 project lead, Joe Hanson, briefed Richard North regularly on the design and the implications. North proved a fast study and personally met with his senior team to gain buy-in. Unanimity would send a strong message but it would have to be backed up by action.

In less than five weeks, the Design Team recommended a set of sweeping changes:

1) A new corporate strategy - for a more integrated company;

2) A clear, single business strategy -- in terms of a business focus and customer value proposition;

3) A detailed service value chain analysis that sorted work into Advantage, Strategic Support and Business Necessity buckets; and

4) An organizational structure to focus on building advantage capabilities around brand, relationships with franchisees and owners, hotel guest experience and asset management, while refocusing business necessity work for low cost.

North addressed the team stating that he was personally amazed at the detail and rigor of the Design Team's analyses. The HEC unanimously approved the high-level design for the new structure and provided a short list of key questions to answer -- mostly around the role of HR and Finance in the model (tension between regional P&L levers and need for global standards).

Set Aside Your Sacred Cows and Keep it Real

In the ensuing month, North announced a "new structure." In the announcement, he also put into place his new leadership team, replacing several slots with Design Team members -- who were ready to step up into more senior roles. Noting that "organization" was more than just structure and a movement of the top boxes in an organizational chart, North also outlined the sweeping changes ahead -- both in terms of what the company needed to do and how it would execute the game plan.

As Phase II (filling in the design details) of the project got underway, the Design Team morphed into Business Alignment Teams (BATs). Involvement swelled to 100 -- leaders were challenged to step up and take on pivotal new roles.

1) Design Team members, Gowers (now running Global Brand Services) and Patrick Imbardelli (President of Asia Pacific), were key players in the new HEC;

2) Karen Whitworth replaced Gowers as the Project Management lead and was later appointed to run Investor Relations;

3) Design Team colleagues, Larry Burns, Tom Seddon, and Tanith Dodge, took on major roles in completing the process and structure designs; and

4) Andrew Simpson, John Bamsey, and David Hughes took on new leadership roles.

During a BAT meeting of nearly 100 people at the Crowne Plaza in Atlanta, each of the 8 BATs presented their proposals to build a stronger, leaner hotel company. At the conclusion of the presentations, Richard North was visible moved. After each of the HEC members spoke on the quality and integrity of the analyses and recommendations. Connecting with his 100 leaders, North addressed the group:

"There are memorable moments in one's life that stay with you. I remember the day I met my wife and the birth of my daughters… Today is such a memorable moment in the life of our company."

Going on Record -- The Commitment of the Executive Team

North promised that the HEC would clear any obstacles that arose, make fast decisions, and above all be fair to employees as the company began the tough work of de-layering management, increasing spans of control, eliminating work, consolidating service centers, and relocating offices (including North's symbolical and financial decision to move out of the corporate offices on North Audley Street in London's trendy Mayfair district).

As the details of the redundancy and facilities closure unfolded, North kept his word -- treating people fairly in the redundancies process, investing in revitalization programs, giving leaders new roles and responsibilities, holding people accountable, and staying the course.

Succession pools were beginning to fill with talented individuals now aligned and focused on the organization's common objectives. And global HR challenges were shifting to delivering well-developed managers who were ready to take up new business roles throughout the organization.

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