The past few years have been no holiday for Thomas Cook, the UK-based travel company. Challenges have ranged from excessive debts to unrest in the Middle East (where the company has significant interest in Egyptian/Lebanese package holidays).
Eighteen months ago, shares were trading at just 21p each – but finished last month at a respectable 153.13p. What (or who) is behind this rapid uplift in performance?
Whilst recent corporate activities like capital refinancing and sales of non-strategic assets are important, there is little doubt that a key driver of change comes in the form of new chief executive, Harriet Green.
Last year Green, 51, famously cold-called Thomas Cook’s president and talked herself into the role of CEO – with no prior experience in the travel industry. Since then, Green has embarked on a major transformation programme designed to deliver cost savings in excess of £400 million.
Green is approaching this challenge with a leadership philosophy rooted in biology: start with the psychology (culture, behaviours), then address the physiology (structures, processes).
But how can this approach quickly deliver vast savings – including nearly 10% headcount reduction – whilst also improving employee engagement?
Green’s priority was to understand the psychology of the organisation to “…boost staff confidence and get them on side”. This explicit focus on people and their working environment was an important foundation for change. To put this into practice, Green e-mailed all 35,000 employees asking them to share with her “everything you think and feel about what we need to do in this company”.
Nearly 25% of people responded with very detailed feedback. It was a bold and open move, since getting feedback is the easy part – it’s all about what you do with it. Time will tell how Green can show that the feedback proved valuable in shaping forthcoming changes at the organisation, and that it was not an exercise to ‘gloss up’ pre-ordained changes.
Finding her middle ground
Green considers a great CEO to be the one dedicated to developing and supporting their people – not necessarily focusing on strategy and numbers. But it seems in Green’s case that she is a rather successful blend of the two approaches.
Green has admitted that, in these early days, she has had to adapt her style to the business, rather than expecting the business to change to fit her approach. So she considers her usual ‘no-nonsense, aggressive’ approach to have been scaled back.
But Green has still very much focused on the core issues and the time-critical nature of the transformation required, for example providing a proof point of her regime by reducing the number of non-Board senior directors from 22 to just 10.
According to Green, and in line with the biology concept, a good CEO should have a rich DNA toolkit meaning a range of skills like resilience, agility and an ability to lead speedy change. And although Green has said that she should be “judged after five years in the job”, her team have implemented 70 major changes in 32 weeks. That’s quite the pace.
Thomas Cook and the investor community will be keeping a close eye on Green as she pushes her transformation programme through to 2015. But she won’t be sticking around long after that; Green has been vocal in saying the best CEOs get itchy feet: “I think you should…make the business great, stay around a little to enjoy that, and then probably move on to the next thing.”
Who knows who Green will be cold-calling in 2016. We suggest you wait by the phone.
– Ally, London