Walk in their flipflops: Leadership in the age of digital disruption

At the WTTC Global Summit in Buenos Aires last month, some of the Travel & Tourism sector’s most experienced CEOs discussed how they face up to the challenges and opportunities of the digital age.

Perhaps the most interesting insight was that doing the same job better and smarter was everyone’s main focus. Being a digital leader is thus less about making sweeping changes to business models and more about making the existing business work faster and better.

Here are some other key insights:

Simplicity of message and of mission came through as a vital theme. Under CEO Peter Fankhauser, Thomas Cook reduced its portfolio from a ‘spaghetti mess’ of 50 brands down to just three. This broke down silos and made the introduction of new IT systems far simpler. The Thomas Cook strategy now sits on a single page. It’s short enough to sit on peoples’ screen savers. Desirée Bollier, Chair of Value Retail, echoed this:

“We try to keep things very simple. So we might have social media now, and we need to use those tools, but at the end of the day the vision remains the same. You want to create amazing destinations where people will come and have fun.”

Travel & Tourism is a service sector, so unsurprisingly everyone highlighted the importance of giving employees meaning and a purpose. “Train them to be really customer focussed, encourage them to do the right thing,” says Fankhauser, “if you put your heart into it, you do it right.” “Listen to them,” says Desiree Bollier. She uses an approach she calls reverse mentorship. “Younger people come and mentor me about what’s new, what’s cool, what’s different… and what’s just noise,” she says. “I don’t need to know how to use all these new tools. I do need to understand which ones are more relevant than others to our business.” This isn’t just about warm words of encouragement. At Thomas Cook, Fankhauser introduced the Net Promoter Score (the likelihood of a customer to recommend your business to someone else) as the sole indicator of customer satisfaction. He then linked the bonuses of top executives in the business to it.

The internet has broken down barriers that businesses of old could hide behind, particularly when things went wrong. User reviews and social media mean the scrutiny on performance is constant and very public. So it’s crucial to develop a genuine service culture that’s totally customer-focussed. As Fankhauser puts it “We don’t put ourselves in the shoes of our customers, we’re a travel company so we wear their flipflops.” Or to use Julián Díaz Gonzalez, Dufry AG CEO’s words:

“The most important thing is understanding the customer and using that knowledge to create the right kind of company culture that will motivate your people to engage with customers in a different way.”

Whilst media focuses on shiny new technology a great deal, the CEOs were less dazzled by it, seeing it as a tool to help them deliver their mission rather than a disruptor of the business itself. Fankhauser put it like this: “Thomas Cook is not a tech company doing holidays, it’s a holiday company supported by technology. We invest in the best technology for the customer’s sake.” With the temptation to spend increasing amounts on the latest must-have piece of new tech always there, it’s important to use it only when and where it’s needed, driven by customer need. At Dufry, Gonzalez has even created a separate division to do exactly this. It has worldwide responsibility for innovation and creativity. It acts as gatekeeper.

In a world of always-on communications, distractions are everywhere, for both customers and employees. Whilst it’s important to trust front-line staff and empower them to delight customers, this has to be balanced with a sense of mission to help them make the right choices. Making the mission understood right across a large, complex business is a big challenge. As Gonzalez says: “Working out the changes you need to make is the easy bit. Implementing them across multiple sites with people using many different languages is the hard bit. And you need to do it quickly, because timing is an issue in this age of digital immediacy.”

“The young people who are coming into our businesses hold all the cards and we should not be afraid of change, we should embrace it,” says Bollier. Indeed, the need to engage more openly with a young, smart workforce and to embrace change came through loud and clear. “You need to be authentic in the digital age,” says Fankhauser.

“Young people are OK with authority, but they don’t like hierarchy. So be yourself and don’t be afraid to sometimes make fun of yourself.”

Further reading: Travel 2025: How Digital Transformation and Global Growth Are Redefining Leadership Roles by Leadership Consultants Spencer Stuart. Join our webinar with them on July 12th. Details on www.wttc.org soon.

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