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NOVOTEL ‘Back to the future’

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Presentation on theme: "NOVOTEL ‘Back to the future’"— Presentation transcript:

1 NOVOTEL ‘Back to the future’
June 2015

2 Agenda The Accor Group The Early years of NOVOTEL
: Signs of crisis Planning the New Strategy Building a New Team NOVOTEL after the changes NOVOTEL into the Future 2 2

3 The Accor Group…. 3

4 Accor Group Presentation
One of the world leading hotel operators Company’s logo is `Feel Welcome` Innovation is its trademark Continuing improving performance is its KSF Respect to customer needs is its principal value 4 4

5 World Accor Hotel Network
Europe 29 countries 2,700 hotels 293,925 rooms North America 2 countries 16 hotels 4,716 rooms Latin America and Caribbean 15 countries 276 hotels 43,584 rooms Asia Pacific 20 countries 647 hotels 123,060 rooms Africa and Middle East 28 countries 153 hotels 29,787 rooms 5 5

6 Brand Portfolio 6 6

7 Timeline Accor becomes Accorhotels and asserts its desire to make everyone feel welcome Creation of NOVOTEL- 1st NOVOTEL opens near Lille’s airport Opening of the 100th NOVOTEL, in Amsterdam 20 years NOVOTEL-200 hotels around the world New friendly to use website: Novotel.com 350 NOVOTEL in 58 countries 1967 2015 1972 1978 1983 1987 2001 2008 2010 2011 2013 1st NOVOTEL outside France The group is renamed to ACCOR 280 NOVOTEL in 46 countries Approved demerger in HotelServices and Hotellnvest Accor rewarded for its commitment to sustainable development

8 The Early Years of Novotel….
8

9 NOVOTEL Competitive Advantages
Bridging Gap Blend of features from 3 and 4 star hotels Strict Management Les Boulons (95 points to monitor standard procedures) Control staff-guests interactions Inspectors (incognito?) Location Hotel sites are out of town Ownership Mostly owned-few franchised Standardization of services Product differentiation Pastel shades with white standard-designed furniture • Consistency at the different touch points • Easy to monitor and manage behaviors 9 9

10 NOVOTEL 9-level Management Structure
Presidents of Accor Presidents of NOVOTEL Directors of Operations Regional Managers Directors Delegates General Managers Sub-Directors Heads of Department NOVOTEL Staff Head Office NOVOTEL Hotel Units 10 10

11 : Signs of crisis …. 11

12 External Analysis New entrants in hotel industry Companies become more cost conscious (Europe’s Recession) People avoid international travel (Gulf Crisis) 12 12

13 Internal Analysis Prices and rates are increasing over time
NOVOTEL stays as benchmark and not as innovator for competitors Profits are declining - crisis in 1993 Long Hierarchical Management Structure has not resulted in agility/sensitivity Self-satisfied culture away from customers Expansion has made NOVOTEL impersonal Low motivation of employees-stack to Les Boulons 13 13

14 Planning the new strategy ….
14

15 Planning the new strategy
Set new values ▪ Clients (guests) ▪ Personnel (staff) ▪ Gestion (administration) Change strategic position ▪ Customer is more important than product ▪ Change logo and brand-identity Obtaining external stakeholder support NOVOTEL receives support and sufficient funding from Accor in order to proceed to the planned project Form and motivate top team ▪ New Co-Presidents with complimentary personalities ▪ One intellectual ,marketing oriented with artistic mind ▪ One operation minded and effective implementer of strategies 15 15

16 The new values of NOVOTEL
The flower (NOVOTEL) gets life from the sun (the customer) 16

17 Building a New Team…. 17

18 McKinsey 7S Change Model
Strategy Structure Systems Skills Shared Value Style Staff 18 18

19 Changes in 7S Strategy Structure Style Systems • Focus on customer
• Reduce costs & increase cost flexibility • Tolerance towards differentiation Structure Reduce hierarchy levels in: group management level (tighter & leaner operational center) enterprise level (improved communication flow & reduced the No. of employees) Style Driven from tight control & absolute hierarchical structure to a more guided one with enriched authorities Systems Recruiting, promoting, rewarding, cost control, supplies, quality control, reporting etc. 19 19

20 Changes in 7S Shared Values Staff Skills
“New” company culture based on NOVOTEL genes, customer not product oriented Staff • Multi-Functional Training to increase flexibility • More autonomy and responsibility to staff • Hotel teams (empathy for colleagues’ work) • Reflective clubs Skills Program: “Progress Novotel” for the development of multi-skilled employees with flexibility to work in different departments Program for the evolution of hotel managers 20 20

21 Project Organization Highlights
Anthropologists’ Work Identified NOVOTEL’s “genes” through intensive interviews across the organization and the need to place customer’s satisfaction at the top of the organization. Open-space meetings among the top team helped further to refine the confronting organization’s issues The War Room Formed at HQ in Evry (1993): Walls full of charts each representing one NOVOTEL. Each chart contains 5 simple performance measures focusing on clients, management and people. 21 21

22 Progres Novotel Progres ΝΟVOTEL project is designed to ensure that staff become competent employees with recognized steps in their training and development. With Progres NOVOTEL new competences are introduced, each corresponding to a different level of difficulty: Bronze: Learn the rudiments of work Silver: Knowledge of work allows for some autonomy Gold: Knowledge of works allows for full autonomy and ability to train others Platinum: Skills of marketing and management are required here, to have the potential for Head of Department 22 22

23 Communication of change -Vertical
2 Co-Presidents Directors of Operations General Managers 3-Day Convention 378 attendants Discussions/ debates Examined/Reviewed proposed changes & future directions New Logo was unveiled Training sessions for communicating the project to GMs Training seminars from GMs to staff for communicating the broad guidelines (brain-storming activities) NOVOTEL Staff 23 23

24 Communication of change -Horizontal
Hotel Teams are formed usually from people of the same functional area, who are meeting everyday and discuss with Heads Of Departments Reflective Clubs are informal groups of staff meeting together to suggest initiatives Hotel Teams The Clubs Reflective Clubs Progress Groups The Clubs are formed from Novotel hotels with similar profiles and interests Progress Groups are formal groups, which operate at the level of country managers and Directors of Operations, which meet regularly once a month 24 24

25 The New Behaviors Recruitment processes: consistency between the actual behavior and the desired behavior Top-managers were removed if not able to demonstrate the desired behavior Participation of mid senior personnel in joint actions & activities Praise the “champions” by promoting their efforts & actions Motivate team spirit 25 25

26 Evaluation of the project
Final Results • Accelerated decision-making processes • Faster responsiveness to customer needs and demands • Cost reduction • Prices reduction • Quality improvement • Cultural change • Financial results improvement 26 26

27 Kotter’s 8 Step Change Model
NOVOTEL Create a Sense of Urgency Management proceeded immediately into changes that established a sense of urgency (removing CEO). Build a Coalition Form a coalition with the contribution of regional managers. Develop a clear Vision Formulation of a clear, simple and concise vision. Share the Vision Continuous activities/actions to convey the vision to the executives and the employees with the contribution of the management team 27 27

28 Kotter’s 8 Step Change Model
NOVOTEL Empower People Abandon hierarchy levels, delegation of power Secure Short-Term Wins Distinguish among the “champions” and the good practices developed Consolidating & keep moving Expansion of training programs Anchor the Change Development of a new culture and behavior 28 28

29 ….NOVOTEL today – new strategic changes..
29

30 The Digital Era The new Accorhotel.com experience
On line check-in / Fast check out Check-in online the day before you arrive so as to save time Receive an SMS with practical information & your invoice by . The loyalty card: Classic, Silver, Gold, Platinum Priotity check in-check out VIP Treatment Free night- Room Upgrade The new Accorhotel.com experience 18 languages/32 versions Virtual guides My Trip Planner : discover, choose, book and pay for activities online The new multi brand application Available on PCs, tablets and smartphones Personalized and customizable application 30 30

31 The Digital Era Novotel Virtual Concierge
Voice of the Guest (VOG) program Customer feedback Customer satisfaction surveys B2B clients Online booking of meeting rooms Negotiated rates and conditions Connect Staff mobile app Send offers via app Streamline processes with real-time status updates on all rooms 31 31

32 A Sustainable Future Accor group’s Earth Guest program
federates the Group’s social and environmental projects and mobilizes its 145,000 employees, millions of customers, and thousands of suppliers and partners to protect the planet and the well-being of its inhabitants. PLANET 21 Program a shared knowledge platform on sustainable development in the hospitality industry that is both free and open to all. 32

33 Earth Guest Program 8 priorities divided into 2 projects 33 33

34 Planet 21 7 Pillars 21 Commitments for 2015 Achievements 34
97% of hotels use eco-labeled products 74% of hotels organize disease prevention training for employees 97% of hotels promote balanced dishes Ensure healthy interiors(85%) Prevent diseases(95%) Promote responsible eating(80%) Reduce our water use(15%) Expand waste recycling(85%) Protect biodiversity(60%) 5,6% % change between 2011 and 2014 88% of hotels recycle their waste 41% participate in the Plant for the Planet reforestation project Reduce our energy use(10%) Reduce our CO2 emissions (10%) Increase the use of renewable energy(10%) 4,5% reduction between 2011 and 2015 3.8% reduction between 2011 and 2015 9% of hotels use renewable energy Encourage eco-design(40%) Promote sustainable building(21) Introduce sustainable offers and technologies. (20%) 40% of hotels have at least three eco-designed room components. 13 hotels are certified as sustainable buildings - LED-based lighting solutions are being tested - Filtered instead of bottled water for meetings are being tested 34

35 Planet 21 7 Pillars 21 Commitments for 2015 Achievements 35
Protect children from abuse(70%) Support responsible purchasing practices(70%) Protect ecosystems(100%) 48% of hotels have committed to protecting children 87% purchase and promote local products 93% hotels ban endangered seafood species from restaurant menus Support employee growth and skills(75%) Make diversity an asset(35%) Improve quality of worklife(100%) 69% of hotel managers are promoted from internal mobility 27% Women are hotel managers countries organize an employee opinion survey every two years and hotels had organized training to prevent psychosocial risks. Conduct our business openly and transparently(6) Engage our franchised and managed hotels(40%) Share our commitment with suppliers(100%) 3 indices for socially responsible investment 41% hotels are ISO certified 80% of purchasing contracts are in compliance with our Procurement Charter 21 35

36 Asset Light Strategy “Asset-light” business model
A business model focusing on minimizing “in-house” resources and maximizing usage of outsourcing opportunities. Hotel Invest: ownership and investment Hotel Services: Management under a fee Increased profitability of the company 36 36

37 Asset Light Strategy Focus on hotel business
Sells non-strategic assets 2010 Compagnie des Wagons – Lits (40%): catering on trains Groupe Lucien Barriere (49%): cazino 450 hotels, worth € 2 million, sold 49 hotels in France, Belgium and Germany worth €388.4m 18 hotels in Sweden( franchise ) 5 in other EU countries for €154m Sells 175 hotels so as to reduce the adjusted net debt by €1.0 billion. 37 37

38 NOVOTEL into the Future….
38

39 2016 Action plan Branding Expansion Asset Management
Invest in digital app Increase by 50% online Bookings Expansion Invest in new hotels in developing countries Develop the management chain Asset Management Focus on EU hotels Restructure the non profitable hotels 39 39

40 NOVOTEL in 2020….


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