business

The challenges facing the urbane, finely tailored Hubert Joly as he takes the helm at the Carlson Companies are basically gritty.

He must revitalize an ailing Radisson brand of hotels, restore growth at the flat TGI Friday's chain and stimulate a moribund marketing division that just lost its CEO.

"Sense of urgency is a good word for my management style," an upbeat Joly said in an interview last week.

In June, Joly, 48, presided over the elimination of more than 200 jobs from the company's workforce, most of them at the Minnetonka headquarters, some of them longtime employees.

Now all he has to do is make money for the Carlson family. And that may be more difficult than it sounds for an organization that celebrated its 70th anniversary this year as a Minnesota corporate icon.

"The board feels very positive about Hubert," said Lawrence Perlman, one of three nonfamily members of the nine-member Carlson board. "But he's facing a headwind and is taking aggressive action to get the company through this economic downturn."

When it was announced in January that Joly would succeed Marilyn Carlson Nelson, he downplayed concerns that the nation's economic woes would hinder Carlson's bottom line.

The rest of the world economy is robust, he said at the time, and Carlson would make up for any weaknesses in the United States with its presence elsewhere in the world. Six months later, that has changed.

"The sentiment about the economy is much darker than it was six months ago," said Joly (his full name is pronounced Hue-Bare Joe-lee). "The wind blows from west to east, and Europe is starting to be affected by that too."

Privately held Carlson reported revenue of $39.8 billion in 2007, although the actual amount received directly by the company is considerably less when the revenue of franchisees in the travel, dining and hotel sectors is excluded.

Joly was selected by the Carlson board to succeed Carlson Nelson after four years as chief executive of Carlson Wagonlit Travel, during which sales more than doubled.

Before his service at Carlson Wagonlit, Joly held executive positions at the French media conglomerate Vivendi, Electronic Data Systems and as a consultant in the high-tech sector for McKinsey & Co.

He was born and raised in France, but has lived in New York, San Francisco and Los Angeles before moving to Minneapolis this year.

Not a routine change

Perlman, chairman of the committee that selected Joly after an international search, said his international experience, strategic vision and sensitivity to the family impressed the board. "We knew [this] wouldn't just be a routine change in leadership," Perlman said.

It's very likely that the family-dominated Carlson board of directors will want to see an improved bottom line as a fourth generation of Carlsons lines up for its share of the company's income.

"You're there to drive results. Curt [Carlson, the founder] was a results guy," family business consultant Tom Hubler said.

"The biggest challenge will be the integration of the [new and old] cultures. There's often a clash over what the family expects from the company."

It's all about family

From Joly's perspective, he works for the family and intends to keep them happy.

"My aspiration is to provide an exciting return on the investment that the shareholders made," he said.

But $4-a-gallon gasoline, the skyrocketing price of jet fuel and turmoil in the financial markets could make that aspiration difficult to realize.

Carlson has an eclectic collection of hotels, from the luxury Regent Hotels & Resorts to the midprice Country Inns & Suites. But the Radisson brand, which has been the company's flagship, needs help.

A survey of travel managers by Business Travel News ranked Radisson 18th of 18 upscale hotels in terms of amenities, rates and appearance.

"It's an older portfolio, but they're working on rejuvenating it in the U.S.," David Meyer, editor of the industry newsletter, said about the Radisson chain.

Of the 1,000 hotels in the Carlson family, 406 are Radissons, and 157 of those are in the United States.

"We have extremely strong assets on which to build," Joly said, noting new and stunning Radisson properties on the resort island of St. Martin and in Frankfurt, Germany.

Joly referred to Carlson Marketing Worldwide as "the root of the company," with loyalty programs similar to the Gold Bond Stamps program on which Carlson was founded.

"We have a fantastic client portfolio" that includes Kodak, General Motors, Mazda, Hallmark, Michelin and the Royal Bank of Scotland, Joly said.

But the marketing division has struggled in recent years as some clients, particularly in the automotive and financial services sector, cut back on events and promotions. Marketing CEO Jim Schroer recently left the company. Joly declined to discuss Schroer's departure.

Carlson's casual dining sector also needs a boost. Folks are dining out less because of tight budgets and the high price of gas. A redesign of the TGI Friday's brand is one step toward reinventing the longtime casual dining staple with locations across the globe.

Joly said competitors in the casual dining sector are growing at an annual rate of "3, 4, 5 percent," while Friday's growth has been "essentially flat."

"There's no reason we shouldn't be going above the market," he said.

Carlson Wagonlit Travel, which Joly ran the past four years, also is subject to the whims of the business cycle and high airfares. But it remains a market leader in corporate travel with an emphasis on savings, service and security.

"In the short term, the economy is not helping. In the medium term, there are opportunities for growth," Joly said.

The June layoffs were the latest in a string of cost-cutting steps that currently will save the Carlson companies $100 million a year.

"I wouldn't have taken this job if I didn't appreciate the Carlson family," Joly said. "As you look closer, you see things more sharply. I see strong assets in these four businesses."

David Phelps • 612-673-7269