Thomas Cook’s Harriet Green is a chief executive in a hurry. It may be scant consolation to Cook staff facing redundancy but when Green took the job last July the survival of Thomas Cook was at stake, at least in the UK.
The group was worth a fraction of its former value. City analysts were suggesting it be broken up.
Green was understating the situation yesterday when she said: “The company was not very well.”
One of the things she noticed first in the job was that some people appeared to wonder why she was there.
“The travel industry is odd in that there are very few people from outside travel,” she said. “In a business of this size you would usually find a mix of people.
But in her first few weeks she found: “There was quite an element of ‘You haven’t been a travel rep’, ‘You have no experience of travel’.”
Another thing that struck her was the attitude of colleagues. “People were shattered at what had happened. The brand they worked for was publicly beleaguered.”
A third was: “We were a siloed business ... There had been lots of acquisitions, but I found little evidence of integration. It seems the synergies stayed in the boardroom...
“We had an OTA [online travel agent] that was a completely separate business. That is an extraordinary way to run things. We decided we had to change it. All the channels are under one head now.
“We had great talent in the OTA but it was being used to compete with the rest of the business. So we have created one clear web platform.”
She said: “Our Northern Europe business makes an 8.6% margin. I looked at the gross margin [in the UK] and thought ‘Why does that not translate into operating margin?’ It looked like we had layers of cost in the UK.”
One thing Green discovered excited her more than anything: “I worked with Google and found 310 million people start their travel journeys with Thomas Cook. It is a reference brand! If we convert a little more of that we will deliver our target numbers.”
So where did she start to turn things around? “My style is to understand very quickly who is on the bus, who is likely to get on the bus and who is not going to be on the bus.
“The first 32 weeks have been about the turnaround, about how to make the business better and ignite interest in it. We have achieved over 70 major changes. For the next 32 weeks we are into the transformation.
“We have a number of brands that are competing [with one another] or duplicating or not adding value and we will consolidate and make things simpler and clear.
“We had this period of buying lots of businesses that did the same thing with different names.”
She insisted: “There is no intention of shrinking, but of being simpler.
“We have a credible, profitable-growth story. [Now] the company has to prove it can execute it.”
She describes some of what has been achieved thus far: “We have consolidated the senior team - one third I inherited, one third we promoted and one third we have hired from outside.
“Travel is fact free: people tend to say ‘I know this’. So we carried out a survey of 18,000 consumers across Europe, looking at their travel behaviour and demographics and at the differences with our own data.
“We developed customer focus groups and this will be a big piece of what we do going forward.
“We will invest in improving the quality of sun, beach and package-holiday vacations across a wide range of income brackets. We will continue to invest in dynamic packaging. We will expand our [exclusive] ‘concept’ hotels and quality, low budget hotels. We will expand our winter sun - to Gran Canaria, Cape Verde, the Dominican Republic.
“Customers have said they would like to stay connected with Cook when not on vacation so we are developing an array of networks to stay connected.
“We have an option whether we continue to have our own airline. In the past, airline capacity has dominated the economic footprint of the business. Cook had capacity and had to fill it.
“We have said let’s have less capacity at the start of a programme.”
Asked if she has achieved the goals she set herself, Green said: “I’m the sort of woman who has stretch targets on the fridge. I have the feeling I’m always behind on my targets.”
The important thing is: “We have made extraordinary progress.
“We have the loyalty and trust of 23 million customers and we would like it to be 24 million or 25 million or 28 million. To do that, we have to be better.”
One final thing Green has learned, she said, is: “The business is not that complex. It is not the nuclear industry. It’s travel.
“How difficult can it be to give people a good holiday?”
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