Olive Kavanagh's Big-Time Strategies for a Midsize Travel Program

Multinational taste and nutrition company Kerry Group employs 24,000 people in 140 countries and, according to its most recent annual report, realized 6.1 billion euros in revenue in 2016. It wasn't always that way. The North Kerry Milk Products cooperative started 40 years ago with just 40 employees. Since then, it has acquired more than 100 companies, diversified its offerings and gone public. It has established innovation centers not only in Ireland and the U.S., the home countries of its founders, but also in Africa, Eastern Europe, South America and Southeast Asia.

Olive Kavanagh entered the organization in 2015 as part of a global unification strategy that executives called 1 Kerry. The initiative aimed to unify the company's diverse interests and streamline operations, data, branding and culture. Kavanagh joined as part of a group of six global buyers focused on transforming direct and indirect spend categories. As a veteran of Microsoft's travel management team, Kavanagh brought sophisticated supplier strategies and deep operational knowledge to rebuild and globalize Kerry's midsize travel program.

Within days of starting, "I was sitting in front of the CEO, senior executives and business presidents," Kavanagh said. She relished that strategic position. "I quickly understood their wish list in terms of gaining efficiencies and standardizing the program, but I was also expected to bring innovation to the table with every partner."

Wish Lists

Executive stakeholders wanted visibility into travel spend. They wanted periodic reports to help them manage budgets. "There was a lot of work to do on the data side," said Kavanagh, noting that much of the prior reporting had been ad hoc and relied on incomplete or inaccurate data sets.

Even those in the corner office, though, focused on travelers themselves. "We had a lot of conversations about the traveler experience," said Kavanagh, including its effect on recruitment and retention. Those conversations motivated Kavanagh to begin her journey with a traveler survey, which the company had never done. "There had been TMC surveys but nothing to capture a holistic view of the program," she said. Without that view, Kavanagh knew her change management strategy would be less compelling.

She asked about travelers' perceptions of travel policy; their experiences with existing corporate travel technologies; whether they knew who to contact in an emergency; what resources they used to answer questions about how to travel on behalf of Kerry. Each inquiry came with multiple-choice responses, but Kavanagh also offered travelers open-ended questions about their top three wishes.

The results were not entirely surprising: When travelers needed to know something, they asked more senior colleagues because there was no clear line to a travel manager. Many believed policy required them to go through the travel management company for flights but not for hotels. Colleagues counseled that they should use online booking for certain content but they'd need to go elsewhere to find other information. Few travelers knew what to do in medical situations or emergencies, even though Kerry contracted with International SOS.

The survey showed positive aspects, as well. "We got great feedback about the agency and the agents," said Kavanagh, adding that Kerry had a 19-year partnership with BCD Travel in North America and a shorter relationship with FCM in Asia/Pacific. On the downside, travelers complained that the Concur online booking tool was clunky and the results did not make sense. They also wanted mobile technology, which Kerry had not adopted for travel, and "like most corporate travelers, they complained that rates in the corporate tool were more expensive than those they could find on the leisure market," said Kavanagh.

Basics & Beyond

Kerry's loosely formed travel program reflected the company's growth by acquisition: Disparate agency partnerships led to different strategies in different regions, and no travel manager was tasked with bringing the pieces together. In North America, for example, BCD Travel negotiated air and hotel contracts on behalf of the region. In Asia/Pac, FCM Travel Solutions had only just started to negotiate volume deals. In Europe, the company contracted directly with suppliers despite partnering with BCD. The disjointed approach caused Kerry to miss contract targets for certain suppliers and also led to a few unmanaged contracts, some of which were never implemented.

Globalizing the travel program was methodical for Kavanagh. She scoured the TMC data, credit card data and expense data to ground herself in frequent city pairs and locations where Kerry could negotiate volume hotel deals. Old air contracts revealed, at the minimum, the volume thresholds Kerry could not meet. She also switched from a management fee model with her TMCs to a transaction fee model, and she negotiated hard to minimize those fees.

To optimize airline deals in Year One, Kavanagh removed one of Kerry's joint-venture partners from the playing field, increasing market share for the remaining two. To keep travel program benefits competitive with Kerry competitors', she introduced a coherent business class eligibility policy, making the overall air package more attractive to partners. She struck two-year agreements at thresholds she was confident Kerry could achieve.

Those were the basics, but she'll be looking for more next time around. "Our contracts will come up this year," she said. "We will be having very different conversations with the carriers than we did two years ago."

What excites Kavanagh is the innovation she brings to the table. "I came from a very mature program. I was eager to show what a difference I could make," she said, and she did not accept the assumption that a midsize program wasn't ready to step up its game.

"Suppliers were sending account managers to me who couldn't even talk the language," said Kavanagh. She sent them packing. "I swapped out 95 percent of my account managers. I asked for the people I wanted, and I got them. Why shouldn't Kerry Group have a traveler experience and program that is as sophisticated as a $1 billion program? We should. The size of the program is irrelevant."

Kavanagh broke away from "a lot of legacy stuff" as she globalized the hotel category, contracting with hotel solutions provider HRS. "Kerry is not in typical business locations. We are just outside of those markets, so our need for independent properties is high," she said. Access to independent properties is a strength HRS has over traditional global distribution systems, whose higher fees can restrict participation by independent hotels.

Kavanagh had to deliver content at the most competitive rates and with the best benefits for the program. In markets with at least 250 room nights annually, Kavanagh sourced strategic hotel partners, about 230 hotel partners globally, both large chain properties and independent. She also analyzed HRS's best-available rates for locations where Kerry booked 50 to 250 nights to see if there was value in negotiating, given the lower volumes. Kavanagh concluded that it didn't make a difference, and she wanted travelers to access the broader content. "I could either spend the next three years trying to get people into the program, or I could give them the content they want," she said. "This way, I get the same savings and it's simple for employees."

Going with HRS opened other benefits, according to Kavanagh. First, the commissions pass-through terms were more transparent with HRS than with previous TMC partners. Second, the hotels no longer had the distribution cost, "so we wanted to see that reflected in our rate. They engaged in that conversation with us," said Kavanagh, noting that the returns on these hotel deals allowed her to reinvest funds in her program.

Likewise, Kavanagh tapped deeper strategies with all her supplier agreements to help fund her program initiatives. Her TMCs and other partners agreed to early signing bonuses and back-end rebates for achieving target thresholds. TMCs reached into technology funds to deepen the relationship. BCD also kicked in services from its consulting firm, Advito, to help Kavanagh with the upfront data analysis for her global airline sourcing. Kavanagh would need those returns to support additional transformation plans.

"You never want to walk in the door at a new job and ask for more funding to drive your program goals," she said. "I didn't leave anything on the table."

Technology, Technology, Technology

Kavanagh heard over and over from her travelers: "Why is the technology so clunky?" She knew the Concur booking tool wasn't up to the standards of leisure sites, but "Microsoft had deployed Concur in numerous locations globally and I knew that it should be working much better than what the travelers were describing to me."

She took the case to Concur, but the company was slow to assist. Ultimately, she engaged third-party consulting firm Opteva to assess the issues and looped in BCD Travel for a 120-day global reimplementation. "We have three sites—Europe, North America and Mexico—and while we knew there would have to be certain local nuances, we wanted to provide all travelers with a 1 Kerry experience." After 120 days of discovery and strategy, Opteva spent a weekend reprogramming the Concur tool.

The traveler response was immediate, according to Kavanagh. Online booking adoption in North America jumped 14 percent. And the complaints? They dropped to nearly zero.

"The tool had been badly implemented in the first place," said Kavanagh, plus Kerry had not run updates or refreshes for more than two years. "You can't do that with technology," she noted. Kavanagh established a travel technology refresh program and supplier performance metrics.

Always Pushing for More

Mobile support was a big technology gap for travelers, as well. After researching four providers—BCD TripSource, Concur, HRS's hotel app and Roadmap—Kavanagh is leaning toward TripSource; she expects BCD to integrate more third-party technologies, even if some compete with its own solutions. Kavanagh also is piloting hotel personalization app Conichi and ridesharing provider Groundscope to see where next to push innovation in the Kerry travel program. Starting in March, Kerry will pilot HRS small meetings solution Meetago.

"I'm always willing to try new things," said Kavanagh, adding that she wants to help suppliers launch innovative solutions. "If suppliers are not presenting innovation as part of our reviews, I actually get concerned."

Even as she drives innovation, she knows it doesn't count for much without a solid foundation and tight data for accountability. "Our data is second to none now," she said, noting that she delivers monthly executive dashboards in Microsoft Power BI to the executive set and provides both high-level and drill-down details.

"It's amazing where we've come. We've been able to show how the behavior changes made in 2017 are directly reflected in the P&L. Therefore, the business presidents have committed to real targets in advanced booking and internal trips. I've never seen... business presidents entertain those discussions," she said.

Kerry Group has actually increased its rates of travel—without increasing spend. That's a big check on the executive wish list.

Travelers got their wish list covered, as well. "I returned the original survey results to them with notes about how we've addressed their high-priority issues," she said. She also asked them in a follow-up whether the travel department met their expectations with the program. The feedback? "We did."