You could say the Covid-19 lifestyle of no-travel-stay-home has been kind to Michael Issenberg personally. Without setting out to do so, he has shed at least eight kilos and feels fit and great. “I woke up one day and realised my pants were loose,” he laughed. “It must be the eating at home, regular meals, no airline food, no eating out, different time zones.”
Professionally, though, you could say Covid-19 has dealt him the unkindest cut of all. His region, Accor Asia Pacific, which he has literally built from scratch over the last 17 years, has been broken up into three regions – Asia, China and Pacific – and his role as well as his direct reports will cease to exist in the restructure laid down by Accor CEO Sebastien Bazin last week.
I asked him what his first reaction was when he was told the news. “I knew there was a restructure in the offing. I knew we had to save money because the business wouldn’t return until 2023 or 2024 depending how you looked at it and the next two years would be challenging.
“I had imagined three possibilities – that APAC might get larger, that it might stay the same and it wasn’t out of the question it could be broken up although I felt there was a lower probability of that.
“So my first reaction was absolutely a surprise. My first thought was, what about the business and how is it going to work? Next was, what will happen to my team, people you know well? I asked Sebastien that. We spoke for over an hour, he explained the new structure, the rationale and talked about implications for APAC, myself and the team.
“There were potential roles in other parts of the world for me but at this point, I don’t want to relocate. I am closer to the end than at the beginning. And I want to stay in the region, between Singapore and Sydney.”
He’s staying on till end of the year to break up what he’s built – in 2003, when he became CEO of APAC, it had roughly 200 hotels, 100 of which were in Australia. Today, it has 1,200 hotels with 232,500 rooms across 22 countries, and accounts for nearly half of Accor’s secured pipeline.
Breaking up is harder emotionally but it’s quicker than building up for sure
Is it harder building up or breaking up, I asked him?
“Breaking up is much harder emotionally but it’s quicker to break up than to build up. Accor APAC, that term didn’t exist before 2003, we built it up.”
Perhaps you and your team did yourselves out of a job because you had built such a big business and autonomous region that Paris felt it was time to break it up, I asked?
“Maybe,” he smiled. “I always treated it like my own business, and made decisions for the business, not myself. I put together the right team to execute. Culture is everything – it’s built on values, and values are built on behaviours, how you live, how you treat people.”
The heartening thing has been the “outpouring of messages, and emotion” which came after news broke of his departure and the breakup of his division. It has taken him by surprise.
“A lot of the messages were so personal, reflecting on individual interactions with people and the impact on their lives and careers. I think I underestimated the impact on people’s lives. They spoke about the enjoyment of working within the culture of autonomy, meritocracy and diversity.
“Diversity is crucial. I consider myself part French, part Australian, part American, part Asian. That has made my life richer.”
The most gut-wrenching thing is leaving his troops or what will be left of it in the middle of the worst crisis to hit travel. “I was committed to seeing the company through this, so yes, it is painful to leave at this time.”
The next era of travel will be driven by politics
Having said that, he recognises that it’s a good time for an exit from Accor. He’s leaving on top of his game and leaving a business which, while decimated now, will rebound with China leading the pack. “We were 7% occupancy in February in China and 70% in August and September looks to be about the same.”
When he was handed Asia to look after in 2003, he and his team drew up the Textures of Asia strategy.
The idea was to keep the business as close to the guest as possible. “That’s why we had offices in Bangkok, Jakarta, Seoul, Shanghai, Tokyo, Delhi, Sydney and Auckland. There was a need for an APAC office because the markets varied in size and needed the support. Then we had 200 hotels in total.
“Now each of these blocks have 400 hotels and they can afford to have their own resources. It makes sense. They can do without the strategic direction of the APAC team.”
Said Issenberg, “The last 20 years of travel in Asia were driven by economics – China opening up in 2001 was the biggest lever of change in so many ways. Its outbound travel changed our business dramatically. Then we saw places like Thailand and Bali shift from Western markets to Asian markets and the intra-Asian travel story is driven by many individual stories – Vietnam has been massively transformed, as has India, Korea as an outbound source, Singapore as a hub.
“The next era will be driven by politics and I can safely say, I prefer the economic story.”
It’s interesting too that Issenberg took on Asia Pacific at the time of SARS in 2003 and now he’s leaving in the time of Covid. “The impact of Covid is more significant. The next few years will be challenging.”
He said, “I believe leisure travel will be as strong as ever – exactly when and how is unclear. Business travel will take longer for two reasons – people are used to working remotely and it will take a while for corporations to rebuild their budgets. I remember in the late 90s, with the advent of email and video conferencing, everyone said, people will travel less but the opposite happened, that tech enabled globalization.
“But the politics has changed. Sixty percent of our business is corporate-related. Huge domestic markets will be fine but Singapore, 90% international, Thailand 75% international, Vietnam – they will struggle. I fear Singapore will be one of the last countries to truly recover.”
Teams with strong culture will prevail, no matter the crisis
Just as teamwork built Accor Asia Pacific, Issenberg believes the best teams with strong culture will get out of Covid well.
“Teamwork is about getting behind a strategy and common belief. It comes from behaviours, the way you treat each other,” he reiterated. “Ironically, to have true autonomy, you need discipline.”
The two key books that have guided him are Stephen Covey’s Seven Habits of Highly Effective People and Jim Collins’ Good To Great. Concepts like “culture of discipline”, “face the brutal facts”, “don’t kid yourself” and “Level 5 leadership” where the leader’s ambition is first and foremost for the cause, for the organisation and its purpose, not themselves, have stood him well throughout every crisis and every shift in the market throughout his regime.
“The tactics changed but the strategy was consistent. The shifts in the business – the emphasis on China, the importance of digital, diversified brand portfolio, bigger emphasis on food and beverage – but the focus on people and values didn’t change, nor did the focus on shareholders, colleagues and guests.
“I enjoyed it every step of the way, it was so much fun. I came from a development background so I loved chasing a deal – right product, right brand, right location – and building a team.”
So you went from good to great at chasing deals, I asked.
“No, my passion is building teams. That’s what I am best at. And it’s reinforced by all these messages I got – almost all referred to the values and culture of the APAC regional team. I had tears in my eyes reading them, it was rewarding. A lot of people can chase deals but it’s harder to build a team, stay the course and never lose your values, no matter the crisis.
“It is values and the team that will get you through every time.”
And if you think Issenberg is going to turn to gardening or farming after life with Accor, think again. For the first time, he’s got an open road in front of him and he’s thinking of a future that will involve some or all of these elements – more family and friend time, social responsibility in helping communities, development and investment work, sports – he used to be a coach – and possibly education. “It will be across that palate, maybe a board role, only if it’s interesting.”
Ending with a Dr Seuss quote, “Don’t cry because it’s over, smile because it happened”, I asked him to sum up what happened.
“We created an amazing business with just wonderful people. That business is worth $3b or $4b as a standalone and we built it from practically nothing. I have enjoyed the people, I have enriched people’s lives, I have zero regrets.”
Note: Michael Issenberg will be speaking live on WiT’s Hybrid Stage at Marina Bay Sands on Oct 1. Purchase your all-access ticket here.