Carlson Wagonlit Changes Corp. Strategy, Structure

<B>Carlson Wagonlit Changes Corp. Strategy, Structure</B>

By Megan Hjermstad

<I>Minneapolis - </I>Carlson Wagonlit Travel this week will begin meeting with its corporate clients to share the new business strategy it completed over the past 30 days.

Since Robin Schleien took over as president of North America last fall, he has been heading up a strategic initiative to chart a new course for the company (BTN, Nov. 30, 2001). In the meantime, however, speculation had been growing as to the future of the second-largest travel management company, given evidence that it had dropped many small-market clients, stopped bidding on new clients and gone through a series of management changes.

"People wanted to know immediately what the organization was going to look like. But by putting a team together and gathering all the information, we did it right and developed a better strategy," said Schleien.

Schleien initially met with employees and customers to solicit opinions and gather feedback. During the past 45 to 60 days, a global management team that consists of 60 people has been determining how the organization would move forward, which meant thinking outside of the industry to draw on new business influences and pose new models.

"We discussed new competition, economic cycles, probable business scenarios, wireless, Web travel portals, then we put it all in a pot and stirred it up. From there, we drew conclusion on the cornerstones of our business," said Schleien. "We determined we need to be more agile, decisive; we just are not built for speed. Over the past two years, we stopped selling: We were not aggressive. This industry is at a level of enormous transformation and is begging for different constituents to morph into creating more value. Being what we were was not good enough."

Responding to the need to provide better and faster response, Carlson has streamlined its organization from seven to four regions and appointed a vice president of client service to each region. Jonathan Nordquist, Don Monaco, Bindu Bhatia and Cathy Voss will head up the eastern, southern, central and western regions, respectively. The four regional vice presidents will report to Rob Deliberto, who in January was appointed executive vice president of client service with responsibility for managing all client relationships (BTN, Jan. 15).

Carlson also has created a new business development team and is rebuilding its sales force from almost zero base. However, "It is not just about removing resources, but about adding and putting more focus in different areas," said Schleien. "We have removed layers, and some employees are being asked to do different jobs."

Though Schleien refused to share the specific number of employees that lost jobs, he said the number represented a single-digit percentage of the company's 6,000 employees in North America. "I am very sensitive any time you affect any life, but it is a necessary step in creating a healthy company for our employees," said Schleien.

Meanwhile, Carlson will be implementing its new strategy, which involves moving away from its previous approach to segmenting clients based on volume. "I am deeply opposed to that," said Schleien. "A customer with a $5 million spend could have the same purchasing mentality as a customer with a $100 million spend, or a customer with $100 million could have a more simplistic view of buying channels."

Doing away with its volume-centric model that categorized clients by size, Carlson will implement a new set of criteria of 15 points to create a strategic profile for each client. "You'll hear from companies that weren't served as well. I haven't spoken to a customer yet that has said, 'Our transactions are not that high, so we can be treated like a second-class customer,' " said Schleien. "We don't talk that game anymore. We are talking strategic profiles, not transactions."

Consistent around the idea of a strategy that is not vertically oriented, Carlson has made a commitment to support smaller market clients that had fallen from the mega's radar screen. "We are in the game for each strategic segment of the market. We've defined multiple strategies, and are pursuing customers that have different procurement strategies and varying transaction volumes that cross over into all markets," said Schleien.

The company also has backed off its attempt to move clients away from onsites and into call centers.

"We will define whether the company tends to dedicate full service, permit a network environment or needs these 10 people in this call center in this geography," said Schleien. "To some extent, we were trying to force feed solutions to customers. We walked away from certain business that didn't want onsites. A one- or two-person onsite doesn't offer much in emergency situations, but if that makes sense for a company, we'll do it.