Fortune favours the bold – rejuvenating Thomas Cook

27 May 2014

Thomas Cook was on its knees less than two years ago, and couldn’t match up to its online competitors. But, the travel giant appears to have been rescued. Harriet Green, the CEO appointed at the company’s lowest ebb, tells Natalie Healey how she adapted her leadership style to revive the struggling business, and scoop the top prize at the National Business Awards.

It's highly unlikely anyone would describe Thomas Cook's CEO as a shrinking violet. When the company, then valued at just £127 million, nearly collapsed in 2011 under substantial debts, resuscitation was looking practically impossible for the world's oldest and Europe's second-largest travel agent. The firm needed to raise a hefty £1.6 billion, but Harriet Green knew she was up to the challenge.

Compelled by the idea of transforming the failing business, the former CEO of electronics company Premier Farnell practically cold-called Frank Meysman, Thomas Cook's chairman, to offer her services. Despite no previous experience in the travel sector, Green was confident she had the leadership skills to change the operator's fate. She wasn't apprehensive. "What's the worst that can happen?" she thought, when appointed in July 2012.

"A couple of things really struck me," Green 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 quite hard to kill a really strong brand."

And it's 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.

"By failing to keep up with its increasingly internet-savvy customers, Thomas Cook was falling short in securing its place in the future. Green however, was undeterred."

But, despite its powerful legacy, by 2011, the travel giant was looking pretty sickly, with plummeting share prices and mountainous debt. By failing to keep up with its increasingly internet-savvy customers, Thomas Cook was falling short in securing its place in the future. Green however, was undeterred.

An early adopter of technology - one of the first people she knew to use a Blackberry, in fact - she was ready to shift the group's efforts towards the web, a neglected arena in Thomas Cook's current guise. The iconic brand just needed to reach the next stage of its development and evolve into something that was still relevant to the traveller of today.

First though, Green needed to get a hold of the business's finances.

"Thomas Cook was basically a good business with a really weak balance sheet. We just needed to get control of cash and costs," she says cheerily.

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 and were able to raise the required £1.6 billion from a mixture of banks, capital markets and bond holders.

Agent of Change

Realising the group had acquired a number of travel businesses that weren't integrated well with the company's other offerings, and that this was confusing consumers, the pair set about determining which products were working and which non-core elements would be sold off.

But Green knew slashing costs would not be the only part of the solution. She needed to get her staff on board to fully understand what some of the company's biggest failings were. She wanted to get to the heart of the problem.

"I've never felt entirely comfortable with the hierarchical context of being a CEO," she explains. "I've always considered myself to be much more at the centre of activities rather than slightly detached at the top of any given pyramid."

So, before she went to the banks, she says her first task was to boost staff confidence by picking their brains. On day one, Green emailed all 31,000 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.

Even now, Green encourages her workforce to get in touch at any time through her private email, the "Ask Harriet" forum or the group's social intranet. A CEO who never stops, 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," she says.

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 among our workplace," she says.

Feedback loop

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's meeting a client's needs.

As a social media enthusiast, Green, who maintains her own accounts, 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."

Green is big on building belief. She describes the momentous occasion when Thomas Cook's share price, which had dropped to a dismal £0.14 when she joined the company, finally reached £1. It was then she knew the business had a fighting chance.

"As the share price was announced, employees were photographing it on their mobile phones, tweeting it, and emailing me to say 'I never thought this would happen'," she says.

Green has learnt that focusing on employee morale is vital in transformations. Celebrating success, something Thomas Cook hadn't done for a very long time, was fundamental. She even had to soften her leadership approach.

"I'm quite open and communicative, but I am naturally quite assertive and demanding. When I realised Thomas Cook really was on the operating table in my first month here, I knew I had to become a little less edgy."

So she now describes herself as a "landa" - part lion, part panda - after management consulting firm Mckinsey diagnosed her character to be as ferocious as the big cat when she needs to be, but with as much love to give as the Chinese bear. It's not clear how seriously she takes this peculiar business jargon, but she did find it helpful to bear in mind when the lion side of her personality became too overbearing for such a poorly performing company.

"Sometimes, when industries go into a consolidation phase, you need different styles of management," she explains. "I think in any leadership role, you must have lots of tools in your toolkit. Sometimes you need to be assertive; sometimes you need to be submissive. If the only tool you have is a hammer, you'll see every problem as a nail."

Adapt and thrive

An ability to adapt has served her well as one of few women who have made it to the top in business - there are currently a dismal seven female directors in FTSE 250. By taking jobs and working in continents that the "golden boys" had no interest in, she was able to gain vital insights.

"Saddened by surveys revealing teenage girls desire to be celebrities, not businesswomen, Green is determined to change some of their minds."

She fervently believes more women should do this type of work and spends a lot of time visiting schools, telling pupils "what marvellous fun" it is to run a business. Saddened by surveys revealing teenage girls desire to be celebrities, not businesswomen, Green is determined to change some of their minds. Only with more positive role models will this attitude change course, so she fiercely encourages other successful women to be mentors too. She quotes former US Secretaryof State Madeline Albright: "There's a special place in Hell for women that don't help other women".

"You've got to go out and show people that you're a completely normal person," she says. "What I like to do is meet young women and say: 'it's fantastic! Work on your English and maths, and then you can run businesses, travel the world and buy the best shoes. Tremendous'."

But, as someone who sits on a number of heavy-hitting boards such as Emerson and BAE systems, she doesn't think quotas are the solution to leadership's worrying gender divide.

"When I sit around that big board table involved in important debates, it's vital that I feel comfortable and able to make really strong decisions. If I think the only reason I'm there is that I'm on a quota, it would diminish my confidence."

Instead, Green, recently crowned Leader of the Year in the prestigious National Business Awards for her "transformation programme that will be a model for years to come", says she sits there knowing she is making an input because of her experience and belief in the company. Diversity will be achieved when attitudes shift and more young women are encouraged to take the risks required for business success, she says.

Green doesn't believe you can only meet once a year to consider future strategy - it is a constantly evolving process in a vortex of change. Who could have predicted ten years ago that mobile phones would soon be the public's predominant platform for surfing the net, for example?

"I lost a parent in my teens and so the idea you know what's going to happen in three years, five years, maybe even ten years' time seems to me a little bizarre," she reveals. "So I think you need to be much more strategically agile."

She believes transforming a business means responding to the here and now to give customers the best experience possible. That seems to have done the trick so far, but she's not one for smugness. Unlike its consumers, it's not time for Thomas Cook to relax and unwind just yet.

"I am the least complacent person in the world," says Green. "We're not done. Transformations take huge energy to pull them off. But I think if more stable businesses experienced the process of transforming and did more in real time, maybe less of them would flounder."

Harriet Green joined Thomas Cook as CEO in 2012. She is an executive with extensive, multichannel business leadership experience of the technology and industrial markets, and has driven innovation and strategic transformation through profitable global growth strategies and delivered industry leading results.