Eating Their Own Dog Food


In his position as chairman of the financial services business, Alan Stewart had led the effort to sell both halves of Thomas Cook. The travel company’s new owner immediately asked Alan to take over as the CEO of the UK and Ireland travel business with Ian Ailles, who became the group finance director. Stewart recalled: ‘‘We sold the business with projections of modest profit in the first year after the sale, with steep growth afterwards, resulting from the integration of the parts.’’ Ailles continued: ‘‘Prior to April 1, Alan and I were intent on maximizing value for our previous parent. We were very much the sellers; we had pushed the price. Now we had to take on the responsibility of the buyer to make the company profitable. We knew it wasn’t the gleaming machine we had sold. But we didn’t really know how broken it was.’’

Thomas Cook had been built by acquisition, so the assorted pieces were not operating as an integrated business. For example, about 70 percent of the tours sold through Thomas Cook’s 650 retail outlets were provided by other tour operators. The distribution division’s managing director argued that his organization made a higher margin when it sold other companies’ holidays and, as a result, the Thomas Cook tour operations division was losing money. In addition, the charter airline was struggling with on-time performance, which exacerbated its low yield factors. Further, the company was located in 23 physical office facilities spread all over the UK and Ireland (not counting the retail shops), including an expensive headquarters building in London’s West End district. Its other supporting infrastructure, from its IT systems and information flows to its HR administration and financial organization, reflected a patchwork of disparate and disconnected processes. Ailles summarized: ‘‘The business was needlessly complex.’’




Outsourcing for Radical Change(c) A Bold Approach to Enterprise Transformation
Outsourcing for Radical Change: A Bold Approach to Enterprise Transformation
ISBN: 0814472184
EAN: 2147483647
Year: 2006
Pages: 135

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