[vc_row][vc_column][vc_column_text]The Thomas Cook company was 178 years old when it ceased operations. Once credited with changing the travel landscape in Britain, the travel service which survived two world wars could not survive a series of bad choices and lack of innovation. In the end, on Sept. 23, 2019, over 600,000 travelers and 22,000 employees were left stranded as the company declared bankruptcy.
Thomas Cook was founded in 1841 and focused on one-day rail excursions. Founded by its namesake, Thomas Cook, the business expanded from offering railway excursions for Sunday school and temperance society attendees in Leicestershire to commercial travel to Liverpool and eventually all of Britain, Europe, and even the U.S. The service eventually went beyond train travel and included air travel, hotels, and a service to book full holiday getaways.
The tagline “Don’t just book it, Thomas Cook it!” became a household phrase in Europe. But even the most familiar brands must continue to disrupt–or they’ll be disrupted.
What should you do to avoid leaving your customers, employees or shareholders stranded?
1. Listen to your customers. Despite undergoing several mergers, Thomas Cook failed to keep their eye on the ever-changing travel market, which shifted its focus to individualization. Travel was no longer a place their customers went; it was part of who they were.
“Value” no longer implied “cheap bank holiday abroad” but rather displaying one’s values through how and where they traveled. The appeal of a trip to Greece for £200 accessible to everyone could not compete in a time when travelers sought to go where others had not, and capture it on Instagram.
Instead of a launching pad to new frontiers, Thomas Cook became an unnecessary impediment to experiencing the trip of a lifetime. Listening to their customers, especially via social listening on social media channels and pivoting to offer customization could have created new offerings for Thomas Cook’s target consumer. Instead, they stayed the course.
2. Fail fast and cheap and do not be afraid to innovate. Thomas Cook was once a verb just as AirBNB and Uber. Thomas Cook was once revolutionary. But what worked shortly after Queen Victoria took the throne–40 years before public electricity was available–will not likely work forever.
At some point Thomas Cook, which clearly had evolved with the times from Sunday railway tickets to online travel, was not innovating quickly or boldly enough.
They no longer took the risks that would allow for new innovation.
Amazon once tried to make smartphones — which were not a success. Yet, they recovered from the failure quickly and put their time and technology into the Echo devices instead. Had they not tried to dive into the smartphone market, they would never have expanded into making smart home devices.
If Uber had never offered its original plan of ice cream delivery service through Uber drivers, which was ultimately a failure, it would have never been able to understand the needs of food delivery and would not have launched the wildly successful Uber Eats. These companies took risks and as a result, even when they failed fast and cheap, they were able to move on to success.
Not every risk needs to be a massive undertaking. Trying new travel packages on a small scale–failing fast and cheaply– could have taught them new ways to serve their customers as they responded in real-time.
Instead, Thomas Cook underwent several mergers that contributed to their growing mountain of debt. The firm merged with MyTravel in 2007 to become one of the biggest holiday companies in Europe and partnered with Expedia in an effort to appeal to online consumers. The more the company underwent mergers, the more debt they accumulated and the less agile they were able to be.
It would be easy to blame Brexit or people who stopped vacationing for the collapse of Thomas Cook, but 60 percent of the British population took a holiday in 2018. This is up from 57 percent the previous year. People were vacationing, they just weren’t booking through Thomas Cook anymore. And while Brexit did impact the travel industry, competitors of Thomas Cook are still thriving.
4. Focus on agility. Companies facing major changes, like Thomas Cook, cannot play the blame game, but they also cannot play the same game. They must be open to new ideas from new people. The market will always be changing, whatever market that may be, but the key to survive is to be agile and open to change.
When costly mergers didn’t help, they should have changed their approach and pivoted to offer different services. That may have meant offering custom vacation packages, a wider range of vacation packages to include luxury travel, or perhaps even looking to fill a smaller niche — whatever the offerings could have been, Thomas Cook should have been willing to focus on agility rather than the brute strength of mergers.
In the end, Thomas Cook employees and stranded customers paid the ultimate price for the company’s follies. But, for companies facing changing markets, these mistakes can be avoided and customers can be spared once leadership stops being afraid of trying new things and loses the fear of failing fast and cheaply and moving on.