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InterContinental Hotels Group shares Best Practice in Risk Management with academia and industry

Extending the scope of IHG Academy as a global network that provides hospitality knowledge and training to the community, Jim Swartz, Vice President Risk Management (Americas) of Intercontinental Hotels Group shared with the academia and the wider hospitality industry a cutting-edge system that the Group is using to monitor the effectiveness of its risk management practice.

Swartz spoke in a ‘Contemporary Challenges’ panel in the context of the 2012 Cornell Hospitality Research Summit (CHRS) which had the theme of “Service Excellence and Performance Growth in the Global Hospitality Industry: Strategies and Approaches for Navigating Forward.” He started his presentation by pointing out that the evolution of hotel industry in the Experience Economy has given birth to new, “softer” assets. “We are not talking anymore only about rooms, restaurants, banquet facilities and bars but also about intellectual property, human capital, customer databases, management and franchise agreements, loyalty schemes and brand equity.”

“With these new assets come new risks,” he said, “and the management of these risks is no longer limited to physical security and safety or the ‘wise’ use of financial and other resources. Our Risk Management functions today are about safeguarding the Group’s commercial advantages, enhancing the trust of its stakeholders and protecting its reputation.” He then presented IHG‘s risk management model and its functions which include operational risk management, corporate risk management, security, business continuity and crisis management, risk financing and risk training.

“In order to champion and protect the trusted reputation of IHG and its brands”, Swartz said, “we needed to create a robust global risk management performance reporting system”. This system was developed by IHG’s Global Risk Management team in collaboration with Dr Alexandros Paraskevas and Dr Chris Chu from the Oxford School of Hospitality Management, an IHG’s strategic academic partner in the area of risk management and responsible hospitality research.

The new IHG’s risk reporting system, a first for the industry, uses a combination of leading and lagging risk indicators as well as performance indicators designed to provide early warnings, highlight risks and drive intervention consistent with the Group’s core strategic objectives. “It is a system of meaningful measures that enables us to have a shared understanding as to where we are and what we need to focus on in risk management” said Swartz while explaining its details “in order to operate ‘Great Hotels that Guests Love’, generate higher returns for their owners, offer a safe work environment where our people can thrive, in a responsible towards the environment and the society way.”

The 2012 CHRS attracted around 300 high level industry practitioners and academic researchers. In a separate panel, Kirk Kinsell, President (Americas) of IHG, moderated the discussion between five hospitality programme deans on the educational challenges for the industry. The deans’ panel members recognised the need for hospitality academic programmes to reflect a better understanding of value management and promote an entrepreneurial approach while the agreed with Kinsell who argued that there is also need for more focus on corporate responsibility.

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