Tom Conophy of InterContinental Hotels Group describes the importance of a sound cultural and management foundation for mobile innovation.Interview conducted by Alan Morrison and Bo Parker
Tom Conophy has been CIO at InterContinental Hotels Group (IHG) since 2006. Before joining IHG, he was executive vice president and CTO of Starwood Resorts. In this interview, Conophy debunks the notion that too many CIOs have their hands tied when it comes to innovation, and he uses the example of the mobile applications evolution to make his point.
PwC: You have been doing some really interesting things with IHG. How did you get started?
TC: I’ve been in technology for 30 years now. I was approached by the chairman of the board to consider IHG about four and a half years ago. The company was going through a significant transformation of its core brands as well as its corporate structure. It had been without a technical leader for a few years, and the chairman and the new CEO wanted to reestablish IHG as a leader. So I was brought on board to help drive a technical direction and an overall strategy for the company as it relates to technology.
With that mandate, we embarked on a back-end refinement of all our core systems. We have a booking engine that does between $20 and $25 billion a year in revenue. We have a Web suite of tools—a Web complex that books about $4 billion in revenue per year. A logical extension for all of that was into the mobile space.
What’s at the core of your mobile strategy?
When I came on board at IHG, the technical community was pretty demoralized. They were disenfranchised, and the business really didn’t view them as value-add.
I knew this all coming in, because the chairman told me what was going on. So I not only started to establish myself with the business teams, but also started to form the core of what is now a pretty powerful technical group.
We’ve established a little bit of entrepreneurial fever by changing the cultural attitude. We got rid of some of the Luddites, brought in some new blood, and just changed things around.
We have built up an enterprise computing platform following an SOA [service-oriented architecture] model, and the services that we’ve created have enabled us to turn on some great mobile applications rapidly.
If you don’t have the back-end capabilities, it’s hard to have a fairly intuitive device that somebody can use as a small pane of glass to look through to what that back end can display. You are not going to type a novel on the phone, but we do book almost $3 million a month now on mobile phones. We expect it to be toward $5 million by the end of the year. This time next year, I’d be shocked if bookings are not over $10 million a month.
So what did you do to get to that point?
We had a mobile app out there for a long time. IHG was one of the first companies to put out a mobile app for booking, but it was pretty lame. It didn’t do too much. We recognized that the device had a nontraditional browser, and so we changed the format and would send out appropriately rendered screens for the phones. It had usage, but not very much. I think we might have been lucky to break $200,000 a month in bookings, not very much.
The early adopters tolerated an environment that didn’t work that well because the phones themselves were not that great and the infrastructure was lacking. The rendering capabilities were not super.
Then the perfect storm scenario happened. You had a higher adoption of smartphones. You had better resolution, better capabilities. You had the advent of 3G and better networking, and then the applications themselves became much more intelligent. So we first revitalized our mobile offering, which was the standard mobile booking application.
We gave it an overhaul from a look-and-feel point of view, streamlined the booking process to make it simpler, and leveraged inferencing capabilities—we knew data about you based on your phone, so we would not need to ask you mundane questions as part of a booking process. From a human factors point of view, we ate our own dog food, so to speak, and we were critical of each other relative to how it worked.
We targeted it for loyalty members first. That helped significantly. That was October 2009. We went from $200,000 a month in bookings to $1 million, and that was due to people using it on iPhone and BlackBerry devices. It wasn’t a specific iPhone app yet.
Then we built an iPhone app and released in May 2010. Right away, it was well adopted by the traveling public. It was rated very highly—we were downloading 4,000 apps a day or something like that. The ratings were very high, and we then surpassed the earlier players that had products out there already. Ours was rated higher because we took the time to make it pretty intelligent in terms of richness of capability without necessarily making the user interface complicated.
We translated some of the learnings from our overhaul of our mobile apps in general into the iPhone apps. And we took feedback from our early adopters. We reached out and asked them what’s working or what’s not working, and what would you like it to do? We had people internal to the business using it. We would set it up in lunchrooms and have people play and give us feedback on the spot. That’s not super sophisticated or scientific, but it tends to work pretty well.
And this is all in-house development?
Yes, all in-house development. We had a small team of guys who were really deep into it, and so we just turned them loose and then did a lot of whiteboarding. I have a humanfactors passion. I’d come in and we’d project all of the wireframes onto large whiteboards and just basically rip them apart. But it was healthy; the culture supports that. It’s not uncommon to be critical and at the same time make suggestions. It’s a very collegial, very collaborative environment—one that might not work well at all corporations, but it works well within the technical community that we have established inside of IHG.
I have about 800 employees across the globe. I’ve always been a strong believer that you have to give people outlets. They have their day jobs, and then they have their passions. The idea is to try to turn on some of those passions. So we’ve established these labs, and we let anybody with reasonable ideas come in. I have two rules. One, don’t burn down the hotel, and two, don’t electrocute the guest. It’s all based on giving knowledge workers the freedom to experiment and then giving them the tools and the resources to make that happen.
It sounds like you are tapping into the increased ability to interact with the guest in some form or fashion. And as the guest gains an online presence, you can tap into that online presence more and more, and extract the information you need to respond to the guest’s personal needs.
Exactly. We have the ability now to send alerts and things like that through the application itself. The standard mobile app is still humming on nicely, and the iPhone app has done fairly well. I think it’s done great, relative to our sector and our competitors. It is the leader by far. That one is equally well received and getting a lot of presence, and that’s helped to kick our bookings to $3 million a month and climbing. The adoption has been extremely high. I have some guys in the group working on another twist for the latest cut of the new Android 10.
We are looking at how to extend beyond booking. Think about a concierge in your pocket. Say it doesn’t matter if you are booking or not. If you are part of our family and you have a need, for whatever it might be, our concierge services help with ideas for places to go, and the app links to Yelp and other services that people use more frequently now.
We’re trying to make sure that IHG has a small position there in terms of your mind share, and it’s not just about, “I have a business trip and I need to think about where I’m going to stay in Prague.” The concierge for IHG can maybe answer this hotel choice question for us and then send the message that way.
We are also doing some things with instant messaging. Instant messaging has more than 350 million daily users, and we are thinking, “Why not enable a very simplified booking process through instant messaging as opposed to a traditional Web site or some other navigation?” It’s just another nontraditional access method. With template-based booking, you can turn that thing into a template, and then you can instant message it very simply with just a couple of parameters, such as a new date, as long as the system knows your profile and preferences behind the scenes. It takes all that into account, does the searches, puts together some potential itineraries, and comes back and says, would you like option one or two or three?
Your interaction with your phone or through some other form of access should be as simple as asking an assistant to get you to Seattle on Thursday, and the assistant runs away and does all the stuff.
If mobile devices become dominant by 2012, are we entering a world of ubiquitous docking stations at some point?
For most executives and most business types, it’s about quick access to information. There may be producers of that data, and they may be sitting in centers in the Philippines or India or wherever else cranking out systems support capabilities. But the executives are more knowledge workers, and they are taking data in small bites and small formats or dashboards. With the use of color and graphics, you can translate lots and lots of information, and you can set up filters to avoid needing to zip through a lot of stuff.
Our viewpoint is that the smartphone will evolve to a hybrid between it and a tablet of some kind. We are looking at these Droid tablets. They may be too big to put into a coat pocket, but they are going to be smaller than the laptops that people have today and there’s going to be a certain form factor that people will settle on. This is because finger sizes are the way they are, and eyesight is what it is. Unless you issue monocles with your devices, you can’t expect corporate computing to be done only on small-glass devices.
If you take the average size laptop and maybe take that to three-quarter size or maybe even smaller, that’s what we think people will end up using. The traditional desktop is for all intents and purposes gone in most companies. We think people will use a personally owned device, and with it they will have access to corporate content that most likely will be shifted into the cloud.
Several of the CIOs we have talked to over the years say they’re not able to do what you are doing. You really focus squarely on R&D [research and development] and the leading edge. They say, well, we have to keep the lights on and we need to X, Y, and Z, and just those things consume all our time and budget.
Those guys just don’t get it. Whenever someone like that talks like that, the CEO should automatically just fire them. They are not doing their job. Within the last four years, I have reduced my overall operating cost by 20 percent, but yet we probably do 200 percent more than we ever have. We do something called Fuel for Fire. We create operating efficiencies and savings that turn around and enable us to put more monies toward investments. I carve out what we call a CIO fund, and I pitch it whenever I submit my budget. It’s about a million dollars a year now. I have earned it through our track records. Remember, when I came to the company, the place was a shambles, and we were able to turn around the whole mind-set.
The gulags [IHG’s development labs] don’t cost me jack. We just took a couple of big conference rooms and changed them. I have done things like bring in free soda, juices, and water. This is not rocket science. We renamed all the meeting rooms after mathematicians and scientists. We put in stress-relieving rooms, where other things can be dealt with, foosball tables.... That doesn’t sound like a lot, but it is a big corporation. You have to establish the environment, but that doesn’t cost very much money.
What I call “traditional CIOs” usually came out of the data center world. They just don’t have what I call the killer instinct, and they certainly don’t have a software-centric background. Every time I come across a CIO like that, I can tell you exactly how they came up in the organization. Those that are really out there firing on all pistons have tended to come out of the software side. The rest either don’t know how to do it, or they are so risk averse they would never, ever risk their position by even attempting to do it, and they have established the culture of losing, frankly.
IHG is forward looking, but as of today, you still issue enterpriseowned devices, correct?
Today we issue a BlackBerry, and then we have a series of laptops. By the first quarter of 2011, our goal is that you can have what we call a CP, a corporate phone, or an individual phone. And regardless of which way you go, you will sign a document that says that should you move, IHG will blank the device and all corporate information will be scrubbed.
But personal information would remain.
That’s right. We really don’t want to cross that line. So we’re focused right now only on our corporate information, working through our legal teams to make sure we have all of our bases covered. The bottom line is that we want to communicate to the staff, “Here’s what we are doing, and here’s what this all means.” And then if they opt in, that’s great. If they don’t, they can just get a standard corporate-issue device they get today and be happy about it.