Inchcape: Crusader

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

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.



Streamlining



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

confidence.



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.



Cultural change



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.



Global communications



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

shortly.



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.



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