Top tips from Derek Jones, managing director of Kuoni…
The background:
Swiss company Kuoni first launched in the UK in 1965. For decades it was a mainly business-to-business tour operator. But when the internet arrived, the mass shift online began to threaten Kuoni. Its well-established travel agent distribution network shrank – scarily fast. In response, Kuoni tried to grow online sales direct to holiday makers, but it didn’t work. Plan B was to launch its own bricks-and-mortar shops. “If other agents are no longer selling Kuoni and the internet is not working for us,” the reasoning went, “we need to start selling through our own physical outlets.”
In 2009, Derek Jones – former distribution director of Lunn Poly and Tui Travel – joined Kuoni as sales and operations director, becoming managing director a few years later. When Derek arrived, the company was beset by low morale and was struggling in its new role as a shop owner: it had opened two stores but had made many mistakes.
Eight years later, the picture couldn’t be more different. Kuoni has nearly 50 stores, a flourishing partnership with John Lewis, and it has broken into The Sunday Times ‘Best 100 Companies To Work For’ list.
Derek explains how he reinvented Kuoni UK…
Lesson 1: Find a winning new narrative
“Five years ago, there was a lot of defeatism around Kuoni’s business model. People would say, ‘Everything is going online’, ‘It’s all low cost’ and ‘We’re doomed’. My response was: yes, people can book holidays direct, but we will persuade them not to. How? We’ll win them over with our amazing service – our knowledge, expertise and personality.
“To transform a business, you have to write a new story. To do that, everyone needs to understand what the new narrative is and how you’re going to follow it. The whole team also needs to believe in what the brand stands for and what the business is doing. If they don’t, then it all becomes meaningless. People will just turn up to work each day and go through the motions. Everyone has to buy into the new story if things are to change.
“I wanted to shift the narrative away from, ‘We’re doomed because of the internet’ to ‘We’re travelling towards becoming the best physical-space retailer for premium holidays.’ To get there, we knew that we needed to open more Kuoni stores and get their look and feel absolutely perfect – they had to match the premium holiday experience that Kuoni is so famous for.”
Lesson 2: Warning! Don’t rush in – take the ‘one-way door test’
“Once you have a new narrative in mind, it’s tempting to rush towards it. But is it the right course to take? There are no guarantees, so you have to be sure. Ask yourself: is it a one-way or a two-way door? If you go through the door and it’s a nightmare on the other side, can you turn around and walk back out again? If you can, fine. It might cost money but at least you can come back through. If it’s a one-way door and you can’t get back again, you need to be absolutely sure you’re making the right call. Having the tools to understand the implications of any such decision is vital.
“It could be a good idea to put more science behind your planning and do more customer research. But sometimes you just have to go with your gut.”
Lesson 3: Find your key people and flesh out your new plan
“With your new narrative confirmed, you need the right people to transform your business. When I joined Kuoni, there was no retail team. I looked around and found two key people. Julie Day – still with Kuoni today – is our property manager. She totally ‘got’ what Kuoni should look like. I recruited her and she helped with store design and build. Next, I found someone to run the stores. Helen Roberts was working behind the desks in the Manchester store. She’s hugely enthusiastic, a complete travel expert and lives the brand. I initially promoted Helen to become retail manager and she’s now sales director for Kuoni UK.”
“With the right people in the right place, we did lots of work with retail agencies and mapped out where our target customers lived. We ended up with a list of 100 target store locations, which we still use today.”
Lesson 4: Put the right values in place
“To reinvent your business, your organisation may need to overhaul its values, or put a few new ones in place. The whole company values and behaviours thing can feel very corporate. Lots of people are cynical about it and I understand why. When it’s done badly and you’re on the wrong end of it, it can be really awful. That said, I genuinely think company values are worth defining and investing in because they help everyone to be on the same journey together. And from a recruitment point of view, they allow you to understand the sort of people who will fit in to your organisation. They also reveal which behaviours are acceptable and which are not.
“Once all that becomes embedded, people management becomes much easier.”
Lesson 5: Find a partner who can help you reach your new destination faster
“Sometimes it’s a good idea to team up with another business because it helps you write your new story faster. We identified John Lewis as a perfect partner for Kuoni some time ago and over the years, we have focused on building our relationship with them. We spent time and money designing a store-in-store concept and creating commercials – basically building a detailed plan of how we felt we could team up for the benefit of both John Lewis and Kuoni. When we felt the time was right, we pitched. That led to a meeting with the commercial director, who we got on with brilliantly.
“We now have outlets within 18 John Lewis stores, along with 30 standalone stores.”
Lesson 6: Show integrity and consistency
“No matter how you are trying to transform your business, my advice is to show consistency, honesty and integrity. Over the years, I’ve had to make people redundant and manage challenging restructures. There’s a way to do those things that still builds integrity. I’m pretty sure I could bump into anyone I’ve made redundant in the street tomorrow and still shake hands with them and talk about what they are up to.
“As a leader you can fake 80% of integrity and transparency, but you’ll be found out on the remaining 20% – those below-radar bits. Honesty and integrity count for more than anything else.”
Using the six lessons above, Derek Jones and his team have taken Kuoni from a seemingly dark place towards a bright new future. Maybe, you can apply some of Derek’s ideas and knowledge to help your own business fly…