He spent the Second Summer of Love in Ibiza, killed off Lunn Poly and took the path less travelled. CLIC chats to Derek Jones, Kuoni UK’s courageous managing director…
“Lunn Poly? Get away!”
It was a British TV advertising classic for a 1980s and ‘90s high-street legend. Each year, millions of us Brits headed to our local Lunn Poly to grab a package deal. At one point there were 780 outlets in Britain – but in December 2004 they all vanished; literally overnight.
Why the hell are we talking about a defunct travel agent? The answer is because we’ve been chatting to Derek Jones, the entrepreneurial managing director of Kuoni Travel UK. We’ve been chasing Derek for months, as we knew he had a brilliant tale to tell, and when we finally sat down with him we were not disappointed. His business wisdom transfers to any sector and his story is fascinating, packed with exciting moments, all driven by a tireless lust for life.
Once Lunn Poly’s commercial director, Derek is the man who chose to liquidate the much-loved household brand and absorb it into Thomson – a brilliant decision in hindsight. The way he announced the sweeping change says much about his down-to-earth, fun-loving style. He recalls: “In 2004 Lunn Poly – Thomson’s retail travel agent – had 6,000 staff. To tell them we’d decided to put all the stores under the Thomson name, we needed to get all 6,000 of them into the same room. So we booked two halls of the NEC, hired Graham Norton as host, asked Britannia [Thomson’s airline] to cater and threw a massive party. We gave every Lunn Poly shop a budget of £500 to get to Birmingham and told them we didn’t care how they got there. I remember standing outside the NEC and seeing around 400 limousines coming in from all directions!”
If you think business is about dry analysis, head-over-heart decisions, balance sheets and relentlessly climbing the greasy pole, you probably wouldn’t hit it off with Kuoni UK’s MD. The Liverpudlian joined the civil service aged 18 but quit after four-and-a-half years to go partying – sorry, to become a holiday rep – in Ibiza. The timing is significant: after five years his civil service pension would have been locked up. As it was, he was able to cash in his fledgling retirement pot and put it to a more exciting use. It was a good call. Derek arrived in Ibiza in 1988 and found himself at both the epicentre and origin of the ‘Second Summer of Love’. Acid house and clubbing culture had arrived on the island. What a time for a 22-year-old to fly in! “I enjoyed the civil service and learned lots,” says Derek. “But I was PA to the chief inspector of factories – you can’t get much more dry and serious than that! Becoming a holiday rep in Ibiza in 1988 was, er, slightly different. It gave me the break I needed and I accidentally found myself in the middle of something I didn’t even know existed.”
The career volte-face set Derek on a trajectory that would eventually take him to the top of Kuoni UK. But there were a few more career diversions to enjoy first. His first Ibiza experience was followed by a winter season on the Costa del Sol. “I basically learned to cha-cha-cha and play crown green bowls,” he laughs. Next came a stint in Mayrhofen as a ski rep, despite zero skiing ability and a grasp of German more associated with another Derek… one with the surname Trotter. He winged it beautifully though, and then it was back to Ibiza, followed by more fun seasons in sunny places. Then, aged 28, it was time to head back to Blighty.
“My philosophy has always been to live for the moment and to make the right choice as it appears in front of you at the time,” says Derek. “If you keep doing that, you will normally end up in the right place. You’ll take a few diversions along the way, but if you welcome them as interesting little journeys and pull yourself back on track, that’s fine. Also, when making a life or business decision I think it’s important to regularly ask yourself: what’s the worst that can happen?”
Returning to England, he took another detour when he became a journalist for a local newspaper. “I’d got it into my head that I wanted to be a journalist so I literally knocked on the door of The Hampstead & Highgate Gazette,” he says. “They told me I could do the odd piece, which was great fun.”
Another speculative door-knocking exercise got Derek back into travel. Walking down Finchley High Street he saw a sign for Thomson Worldwide. Despite working for Thomson for years, he had no idea that this office even existed. Typically, he boldly knocked on another door and met the lady who ran the company, Tracy Denman-Hughes. They hit it off and two days later he was on the sales floor, headset on, sealing deals.
Derek says his sales experience strongly influenced the rest of his career. “While selling I learned how to build rapport with people,” he says. “I realised that you have to sell yourself first before you can sell anything else. It might be trite but it’s true: the customer buys you before they buy a product. If they don’t buy you, they won’t buy anything from you.”
Moving up the ranks, Derek soon became north-west area sales manager and then, in his early 30s, national account manager. “When I became an area rep and got the keys to the Vectra, I thought: ‘I’ve finally got myself a proper grown-up job!’” he says. But despite his lack of out-and-out business experience he thrived in his commercial role and showed talent for creative, free, entrepreneurial thinking – as well as excellent people-management skills.
His company soon realised it had found someone who could make a difference. After a stint as head of new product development, he was promoted to the board aged 33 – first as commercial director for Thomson and then in the same role for Thomson’s retail travel agent, Lunn Poly. At this point Derek decisively made one of the biggest calls of his career – to kill off the historic high-street brand that he represented. His thinking was based on commercial logic sprinkled with gut instinct and customer knowledge gained from his holiday rep years.
“I was convinced that Lunn Poly had to go because for every pound we were spending on Thomson we were having to spend another pound on Lunn Poly,” Derek tells us. “It seemed wise to pick our strongest brand and leverage that, otherwise we were double spending. The internet had arrived and the industry was changing fast, which demanded more agility. Also, having dealt with our customers face to face for many years as a rep, I knew they didn’t think like industry professionals did. We in the industry were fixated that Lunn Poly was a ‘travel agent’ and Thomson a ‘tour operator’. But most customers neither knew nor cared. They just wanted to book a great holiday as easily and as cheaply as possible.”
Derek’s plan to focus on one brand – Thomson – and kiss goodbye to its high-street travel agent Lunn Poly met serious in-house opposition. “Many people were against it,” he says. “One guy told me that the Lunn Poly brand was so well known that shutting it down would be ‘a career-ending move’. He was sure that Thomson was – and always would be – a tour operator and that you couldn’t possibly turn a tour operator into a retail brand.”
Toughing it out and winning over colleagues with opposing ideas is a key skill for any leader and Derek’s advice is this: “If you meet opposition it can 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. In this instance I gave it more thought and concluded I was right. I stuck to my guns.”
He has a word of warning, however, for anyone walking blindly towards a big gut call: you should always put your idea through the “one-way door test”. Derek explains: “Whenever you come up with a business idea or new way of working, ask yourself: is it a one-way or 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 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 because you’ll be changing your business permanently. Having the tools to understand the implications of any decision is vital. I think Jeff Bezos at Amazon was the first to talk about one-way and two-way doors, and we use the concept a lot at Kuoni.”
Following the successful absorption of Lunn Poly into Thomson, Derek became retail and commercial director of Thomson Holidays. Under his watch the change kept coming – faster and harder than ever. The demise of Lunn Poly was just the start and by 2006 the travel industry was experiencing extreme turbulence. Growth in online bookings plus the appearance of low-cost carriers such as Ryanair and easyJet now threatened the very existence of Thomson and other big players such as Thomas Cook and First Choice. Their traditional, vertically integrated business model comprising a travel agent, which then passed customers to a tour operator, which in turn passed them to an airline – all three owned by one overarching business – was at risk. Thanks to the internet, customers could now book everything directly. The result was speedy consolidation: within four months Thomas Cook had merged with Air Tours, and Thomson had joined forces with First Choice to create Tui Travel.
Post merger, Derek found himself with 1,600 shops and the task of overseeing the commercial activities of two businesses that had been bitter rivals. “I remember hosting our first conference after the merger,” he says. “First Choice’s colour was pink; Tui’s was blue. To create a feeling of togetherness I asked everyone to wear normal work clothes, not uniform. But that was miscommunicated and I walked out to a sea of pink and blue – the hall was completely pink on one side and completely blue on the other with a clear divide in the middle! I remember giving them my message, which was something like: ‘I’m from Liverpool and hate Manchester United. Nick (my equivalent from First Choice) is a Manchester United fan who hates Liverpool. Yes, we’re all tribal but even Liverpool fans can see that Man U is a brilliant football team. So let’s admire each other’s positive attributes and let’s work together!”
After managing the post-merger transition, Derek left Tui. He’d been there for 20 years. It was agreed he would leave on the day his son Charlie was born – whenever that might be. “I was in Stoke-on-Trent presenting to the Co-Op Travel board when I got the call,” says Derek. “My wife Nat said Charlie was on his way and I’d better come quick. So I wrapped up the meeting and said I’ve got two announcements. First, my wife’s having a baby and I need to leave now. Second, this is my last day at Tui and I’m not coming back!”
Derek then enjoyed a nine-month career break in Australia before Kuoni – wanting to quickly build its retail consumer sales operation – came knocking in 2009.
Since joining Kuoni UK as MD, Derek has taken its number of physical stores in Britain from two to 50. The company has broken into The Sunday Times ‘Best 100 Companies To Work For’ list, developed an exciting and profitable partnership with John Lewis and completely re-energised itself as a brand. Derek has achieved this by communicating a clear vision, acting upon it, and bringing confidence and sense of enjoyment back to the whole team.
“Five years ago, there was lots of defeatism around our business model,” he says. People would say ‘it’s all going online’, ‘it’s all low cost’ and ‘we’re all doomed’. My response was: yes, people can now book holidays direct but we can and will persuade them not to. How? We’ll win them over with our amazing service – our knowledge, expertise and personality. We then set about reinventing the brand with this idea at its core. We started again.”
We’ll zero in on exactly how Derek turned Kuoni into a successful consumer retail brand and share more of his business lessons in a future article. But for now we hope you have enjoyed this leader’s unique and inspiring career story. It shows exactly how far courage – combined with a sense of fun and a philosophy to live for the moment – can take you in business and in life.
So why not take a leaf out of Derek’s book? His tale proves that knocking on doors and asking ‘what’s the worst that can happen?’ can take you right to the very top.