After two years of bad news the distribution giant Inchcape is finally
digging itself out of a corporate quagmire. Kate Nicholas talks to the
man behind the recovery
Keeping up with Philip Cushing on a day-to-day basis must keep his
corporate communications team fit. The new group chief executive of
Inchcape strides around his office empire with a single-minded sense of
purpose, his staff scurrying in his wake.
This hectic schedule leaves little room for sweet talking journalists as
I discovered when I visited his Cavendish Square offices. Time
management is high on his agenda. Irritated by the perfectionism of our
photographer, Cushing waved the lense aside after a few minutes, and cut
straight to the chase, abruptly informing me that I had 45 minutes to
discuss his strategy to revitalise the international distribution giant
he has inherited.
Although he may appear direct to the verge of brusqueness and rations
his time with military zeal, as the interview progresses it becomes
obvious that he does indeed deliver the goods with a disarming honesty
and urbane charm.
A relative media virgin, Cushing suffered something of a baptism by fire
when first appointed group chief executive of the ailing international
distribution giant Inchcape in March this year. But after two years of
declining sales and spiralling share prices, Inchcape appears to have
returned from the dead.
As the purveyor of the first glad Inchape tidings for over two years,
Cushing found himself thrust into the glare of the media spotlight.
Last month, the sale of Inchcape’s insurance arm, Bain Hogg, to Aon was
closely followed by that of Inchcape Testing Services, the world’s
largest non-automotive testing organisation. These sales raised pounds
540 million towards cutting the company’s net debt figure which stood at
pounds 509 million in June 1996. The signals are that the ailing
conglomerate is finally on the road to recovery.
Inchcape’s convalescence officially began on 25 March, when group
managing director Philip Cushing stepped into Charles Mackay’s shoes as
group chief executive, only a couple of months after Colin Marshall’s
appointment as chairman.
At 44, Cushing, found himself as head of an unwieldy pounds 6 billion
organisation, with 44,000 staff in 100 countries, covering industries
ranging from insurance, to the import and distribution of Japanese cars.
Cushing is regarded by his staff as an ‘Inchcape’ man, who knows the
company from the ground up. He joined the group in 1990 as chief
executive of Singapore-based Inchcape Berhad, moving up to the main
board two years later, where he was responsible for the group’s
marketing, shipping services and Coca-Cola business.
Promoted to group managing director in March 1995, Cushing was charged
with overseeing a cost-cutting and disposal programme designed to halt
Inchcape’s two-year decline, which saw its share price plummet from over
pounds 6 in 1993 to pounds 2.04 at the end of 1995.
The downward spiral was originally triggered by the appreciation of the
Japanese yen which led to the lack of competitiveness of Japanese cars
in Europe. The group’s traditional policy of protection through
diversification failed to halt the rot in its automotive business and
after repeated profit warnings, Inchcape finally dropped out of the FTSE
100 in December1995.
By the time Cushing took over as group CEO a few months later, the
company had traded in its plush St James’s headquarters in favour of
offices in a high rise block on Cavendish Square. The new modern offices
are a far cry from Inchcape’s colonial heritage, but the move shaved
around pounds 1 million off the group’s costs. Inchcape’s new
headquarters also seem to suit the younger, brasher style of its new CEO
as much as its new course of strategic development.
Cushing’s first action as CEO was to unveil his plans for the
streamlining of Inchcape through the divestment of many of its key
business interests, including Bain Hogg and Inchcape Testing services in
order to concentrate on international distribution.
The group’s business can now be stripped down to about five different
activities, all of which are clearly distribution-related, relieving
journalists of the task of trying to deduce ‘some kind of esoteric
connection’ between insurance broking, Coca-Cola, testing laboratories
and motor cars. As Cushing is keen to point out: ‘The complexity arises
through the product, not throughwhat we do - we buy things, we stock
them and we sell them.’
Not surprisingly, considering the scale of the organisation, simplicity
has become a key concern of Cushing’s, both in terms of operation and
communication. ‘One of the key issues for Inchcape is the company’s
complexity and the fact that it has been trying to communicate
relatively complex arguments. But nothing gets retained, so the feedback
we get is that Inchcape is not transparent enough,’ says Cushing.
‘In fact we have given out lots of information, the problem is that
people have ended up more confused than when they started, so we have
got to simplify the business itself and the communications of our
strategy so that people readily understand what we are trying to do. If
we don’t succeed then they have every right to be dissatisfied with us
but at least they understood what we wanted to try and do.’
However, Cushing is hardly shouting from the rooftops about his plans
for the group. While acutely aware of the importance of an effective
communications programme, he prefers to let results speak for
themselves, emphasising the fact that it is still early days.
Despite bringing in Bridget Walker as investor relations manager in
April this year, Cushing says his focus on investor relations is
minimal: ‘I feel our shareholders would rather I spend my time improving
results, than telling them about what I am going to do.’
In terms of the group’s City audiences, Cushing is also wary of making
any great claims. Having once fallen from grace, the group is now
concentrating on communicating the fact that Inchcape has recognised its
weaknesses and is taking strong action to tighten discipline and rebuild
Media announcements so far include the confirmation, on 23 September,
that interim pre-tax profits had held steady on the previous year buoyed
by an upturn in its crucial motoring business, and the sale of Bain Hogg
and Inchcape Testing Service - fulfilling promises made at Cushing’s
inaugural press outing in March.
For the time being, however, Cushing is more interested in talking about
how he is communicating this cultural change to the group’s internal
audiences. In May last year, as group managing director Cushing found
himself in the unenviable position of announcing 2,000 redundancies
worldwide - including the suspension of its employee communications
function - just at the time when the group’s shares finally began to
show an upturn.
Convinced that the board had made a major internal communications
mistake, Cushing developed a dynamic employee communications strategy
based on in-depth research into employee needs and opinions.
By the beginning of 1996, Nanci Tangemann had been taken on as employee
communications consultant to devise a global internal communications
programme in conjunction with group corporate affairs director Paul
Barber and group public relations manager Johanna Lavender.
At the core of this communications programme lies the message that in
the new, more focused Inchcape, methodologies will dovetail and overlap,
with staff possessed of a set of shared and interchangeable competencies
and values. Cushing’s prime communication concern is now to impress the
meaning of the corporate values of service, teamwork, innovation,
respect and results upon Inchcape’s vast workforce.
‘We are now concerned with ensuring we have systematic ways of making
people conscious of the need to innovate, to serve the customer in every
way they possibly can, to behave consistently with [these] values.
‘It revolves around practical things like incentive programmes, proper
recognition programmes, skills development programmes - a whole host of
initiatives that support the values so that people really understand
‘this is for real, it is permanent. I had better get to understand all
this stuff because this is the way that the company is, and how it is
going to be’,’ he explains.
Some might find communicating these values to such a geographically and
culturally diverse workforce a daunting task. But Cushing says he takes
encouragement from the success of global communications programmes
undertaken by his peers.
‘While it is a big task, I am not overawed by it. I have a chairman
[Colin Marshall] who has done it, on an international scale from a much
worse starting point than Inchape,’ he says.
‘The multi-national dimension just makes it more interesting. In many
ways it can be used to give people more reference points, more examples
and more inspiration,’ says Cushing. ‘In some cases the nature of our
business makes it more difficult. We represent very strong companies -
Coca- Cola and Toyota have their own cultures -and in each case it is a
matter of working in partnership with these companies, so there is an
extra level of complexity about culture change.’
So, as a group representing such strong brand names, can the new
Inchcape hope to emerge as a brand in its own right? Cushing says this
is an issue he has yet to get to the bottom of, but that he eventually
wants to build Inchcape as a ‘powerful family brand’.
‘At the moment we are building a sense of belonging internally and I
hope this will transform itself into a physical manifestation of a
programme of excellence, but we have to start with the basics. Marks and
Spencer didn’t promote its brand until it was sure that it had got its
product positioning right and proposition correct,’ he says.
In the meantime Cushing’s directness and his ability to hit the ground
running may help to reforge for the company the kind of corporate
identity and personality generated by the late Sir George Turnbull and
subsequently lost in the recent miasma of mixed media signals.
Cushing believes the communication of a clear sense of direction by firm
and inspiring leadership will take Inchcape back to its former glory.
‘I originally joined Inchcape, because I felt that the man who was
running it was someone I wanted to follow, and that is what I would like
to get back to,’ he concludes.
Inch by inch: The steps to recovery
Inchcape’s global communications strategy is co-ordinated at ground
level from London by Paul Barber who was appointed group corporate
affairs director in April 1996.
Barber’s remit encompasses media relations, investor relations, employee
communications, community affairs and public affairs. The company is
currently in the process of employing a full-time employee
communications manager and the appointment is expected to be announced
Three regional corporate affairs managers oversee communications in
China, Hong Kong and Taiwan; South East Asia; and Japan and Korea. The
group also has agency support in South America, Eastern Europe and parts
of South East Asia and the Middle East.
Cushing’s internal communications programme focuses on the power of
face-to-face communications, encouraging senior managers to ‘walk the
walk and talk the talk’ in communicating with workers while visiting
sites around the world. Even Cushing makes time to hold ‘symbolic’
round-table breakfast meetings with staff, the impact of which he says
cascades down to other workers in regional centres, helping to embed the
company’s corporate values at every level.
His curious mix of hard-edged dynamism and ‘man of the people’
egalitarianism has obviously won him the loyalty of his corporate
communications department. Paul Barber is effusive in his praise of
Cushing - the man who, in the middle of selling off one of his group’s
major assets, remembered to stop his chauffeur-driven limousine to pick
up bacon butties for breakfast for the communications team who had been
working since dawn.
The central planks of Cushing’s cultural change strategy also include
internal publications such as Inchcape World and Inch-net, an electronic
bulletin board system which sits on the standard Internet system.
Currently on trial in London - with plans to roll out into Hong Kong in
January - Inch-net acts as a global corporate newsletter, including
current press coverage and daily share price updates, while also
providing a means for employees to exchange ideas and direct queries to
senior executives including Philip Cushing. At the same time, the Inch-
net acts as an instantaneous delivery system for the group’s Employee
Forum, a comprehensive and up to date briefing on corporate strategy
which enables managers to deliver consistent messages on corporate
values on a global basis. The company is also considering investing in
Business TV and satellite broadcasting.