Saving a company that is publicly known to be on the brink of extinction is certainly no easy task. Failing to compete with online travel deals, and impacted by political turmoil in Egypt and Tunisia, Thomas Cook nearly collapsed in 2011 under debts of more than £1 billion. Resuscitation was looking practically impossible for the world’s oldest and Europe’s second-largest travel agent, but one woman knew she was up to the challenge.
Compelled by the idea of transforming the failing business, Harriet Green practically cold-called Thomas Cook’s chairman to offer her services as CEO. Despite no previous experience in the travel sector, Green was confident she had the leadership skills to change the operator’s fate. "What’s the worst that can happen?" she thought.
"A couple of things really struck me," she says, sipping green tea in her bright and modern office near St Paul’s Cathedral
in London. "One was what a strong and powerful brand Thomas Cook was at 173 years old. And, also, that vacations across Europe for a wide demographic were still important. I thought there was enough of a fighting chance. After all, it’s hard to kill a really strong brand."
It is a brand built on an impressive history thanks to the dedication of one man, whose large sepia-tinted portrait hangs above Green’s desk, watching over her leadership. In 1841, Thomas Cook began his international travel company with a successful one-day rail excursion at a shilling a head from Leicester to Loughborough. Humble beginnings indeed, but it launched a new kind of organisation devoted to helping the UK see more of the world. Now, with more than 20 million customers, the group operates from 17 countries.
So, how can you capture the legacy of 170 years but update a business to survive in these modern times? Green had a few strategies up her sleeve when she was appointed in July 2012. And nearly two years later, Thomas Cook has a much sunnier disposition and a healthier share price – up more than tenfold since Green took over, when prices dropped to just £0.14.
Shifting focus
Green, whose background is in electronics, has shifted the business’s focus onto technology. Her previous appointment as CEO for Premier Farnell, a distributor of components such as microchips and batteries, saw her move the majority of its business online. And, similarly, by keeping up to date with how the public is now searching for, booking and experiencing holidays, she has promised a "high-tech, high-touch transformation" with an emphasis on internet sales for Thomas Cook as well.
In closing some of its physical stores, updating others by doing away with polyester uniforms and dusty brochures, and using tablets and smart phones to showcase experiences, Thomas Cook is now trying to ensure its place in the future.
The company has also increased its collection of hotels for its premium and budget customers. And, it’s recently announced a new range of "concept hotels". These include completely child-free properties in their so-called "exclusively adult" offerings. Or SunConnect, the first beach holiday experience to use digital technology throughout a resort. Here, customers have the ability to browse and book daily activities on their digital devices. And, a web-savvy holiday host called ConnectScout will facilitate digital activities for families, such as geocaching or Xbox gaming.
"These new resorts show more clearly what differentiates us, while offering a high-quality holiday experience that families can trust," says Green.
She reveals the floundering economy hasn’t dampened holiday sales as much as one might think. But, what she and her advisers have noticed is leisure travellers, particularly families, are increasingly looking at all-inclusive hotels. Once considered unfashionable, package holidays are back in vogue. Around 60% of the company’s holidays now fit into this category.
"People are looking to manage their budget, and parents want to know that kids can have endless coke and ice cream without the bill getting any bigger," explains Green.
As a woman who’s worked on four different continents, she’s most excited about the new destinations the company is now offering. Cape Verde, for example, is a new winter location for the group with seven hotels in the Santia Maria resort. The organisation is also extending its sights to the Caribbean.
And, she believes even in these financially uncertain times, the public are getting more adventurous in their choice of holiday. Forget the simple combination of sun, sea and sand, she’s seen existing customers starting to take a more varied approach. From arctic endeavours to city breaks, surveys reveal people want more original experiences than they’ve desired before. But, Green says the secret to Thomas Cook’s recovery is that while customers want an exciting time, they still want to do it in safe hands.
"The fabulous thing about Thomas Cook is it’s a trusted brand," Green explains. "If we say it’s going to be safe and we’ll protect you, that is what we will do."
A clean slate
Green’s words reflect an emerging trend in an era of abundant online booking sites. Many thought the role of a travel agent would become redundant, but for customers with complex itineraries in unfamiliar countries, professional expertise can be reassuring. Moving more of the business online could give a company the best of both worlds.
Underneath all its failings, Green saw great potential for Thomas Cook. But, before she started implementing new products, she needed to fix its finances.
"Thomas Cook was basically a good business with a really shitty balance sheet," she says. "First of all, we needed to get control of cash and costs."
Chief financial officer Michael Healy was appointed to work alongside Green to drive a financial turnaround. She refers to their partnership as a "perfect arranged marriage". They didn’t choose each other, but it worked. Together, they looked at all the excess costs the company had built up over the years.
Realising the Thomas Cook Group had acquired a number of travel businesses that weren’t integrated well into the company’s other offerings, and that this was confusing consumers, the pair set about determining which products were working and the non-core elements that would be sold off.
But, Green knew that reducing costs would only be part of the solution. The business needed to focus on growth too.
"If you’re just going to take costs out, that has a finite lifetime," she explains. "You can’t just shrink to greatness. We needed to show how profitability would grow."
Before she went to the banks to beg for cash, she says her first task was to boost staff confidence by picking their brains about the company’s failings. On day one, Green emailed all 35,000 employees and asked them to share with her every feeling they had about the business.
"I always do this when I start at a new organisation, because I think people in the company know a lot more than you probably think," she says. "They may not be able to solve this issue, but they will tell you what’s wrong."
Within just one month, 8,000 employees had filled out her survey, and Green had a better idea of what needed to be achieved. She was on her way to convincing the staff she had Thomas Cook’s best interests at heart.
Employee feedback
Even now, Green encourages her workforce to get in touch at any time through email or the company’s intranet service ‘Ask Harriet’. Surprisingly, for a CEO with an eye-watering to-do list, she guarantees a response to every query within 24 hours, rising at 3:30am to answer the bulk of her correspondence.
"I always connect with the wide employee base. When people tell you what they think is wrong, it’s much more obvious to see how you should go about fixing it."
Demonstrating how valuable staff feedback was to the organisation was her way of building what she felt was the most important aspect of getting the struggling travel business back on track: belief in the company.
"When you have a burning platform, people can either work with you or they can dive into the flames. So I got a lot of support from people, and I still have it among our workplace," she says.
But for Green, a self-confessed feedback-junkie, getting the opinions of her staff is only half the story; she’s keen to hear from her customers too. She encourages them to tweet their experiences, and issues with the company’s services, to determine how well the organisation is performing and whether it is meeting a client’s needs. An early adopter of social media, Green likes to ensure she is connected to what her consumers really want.
"I get customers telling me their vacation was the best experience of their life, but I also receive comments that say ‘I think you need to improve this hotel, I’m not happy with it.’ I respond to all of these," she says. "Maybe all CEOs should do this, but certainly when you’re doing transformations, you have to know what’s going on. You have to be at the centre of the vortex for change."
Not one to get excited about a ten-year plan, Green believes transforming a business means responding to the here and now to give customers the best experience possible. But, she’s not about to get complacent, and intends to keep listening, strategising and delivering. Unlike its consumers, it’s not time for Thomas Cook to relax and unwind just yet.
"We’re not done. Transformations take huge energy to pull them off," says Green. "But, our main intention is to make more of the world accessible to more people, which is really what Thomas Cook, the great man himself, would have wanted."
