Thomas Cook Group faces serious risks to its brand image

May 18, 2015

A highly damaging story had developed following the way Thomas Cook dealt with the deaths of two children on a package holiday in Corfu. The personal tragedy also threatens the reputation of the organization

The developing story

Approximately ten years ago, a family holiday turned to tragedy.

Last week [13th May 2015] an inquest in Wakefield Yorkshire found a verdict of unlawful killing, and that Thomas Cook had failed in exercising its duty of care.

Thomas Cook responded by sending a letter of apology to the parents who claim to have seen it only through journalists covering the story.

According to The Guardian

According to The Guardian, The apology was reportedly sent by Thomas Cook’s chief executive, Peter Frankhauser, two days before it was revealed that the company received £3.5m in compensation from the owners of the hotel in Corfu where the tragedy occurred in 2006.

Christianne and Robert Shepherd, who were on holiday with their father and his partner, were overcome by fumes from a decrepit boiler.

Sharon Wood and Neil Shepherd said in a statement on Sunday that they had not received the travel company’s letter, and had only been shown it by reporters. “It is disgraceful that after all we’ve been through Thomas Cook are still putting us last in the equation.”

The popular press began to call for reparations from Thomas Cook to the family.

Background to the Thomas Cook group

Over the last decade the company’s fortunes have fluctuated wildly. The venerable firm of Thomas Cook was the prey of financial takeovers which resulted in considerable reconstruction, although the value of the historical brand has been recognized.

Harriet Green was appointed CEO in 2006 at around the time of the Corfu affair. Her leadership has been widely acknowledged as the outcome of an outsider successfully brought in with fresh ideas for rescuing the new company.

In earlier posts, I wondered whether she would be able to make an impact on the strongly entrenched corporate culture.

Hariet Green was replaced in November 2014 by Peter Frankhauser. The company stated that it needed someone more familiar with the leisure industry. Exit Harriet with a controversial golden goodbye, and promotion for the Thomas Cook insider from his role as Chief Operating Officer.

The sleeping crisis for the Company

For the company, attention to the Corfu hotel tragedy may have been replaced by concerns for more pressing strategic and financial difficulties. But the family fight for support began to attract media attention. Four years after the fatalities, [in 2010] the BBC had reported that:

a Greek criminal court [has]convicted the manager of the Louis Corcyra Beach Hotel in Gouvia and two other staff of manslaughter. The travel representatives of Thomas Cook were not changed.

Thomas Cook said in a statement: “What happened in Corfu was a tragedy and the thoughts and sympathy of everyone at Thomas Cook will always be with the family and friends of Christianne and Robert Shepherd.

“We have always maintained that this tragic accident was the result of a unique set of circumstances, none of which could be the responsibility of the company or [of its representatives]

“We believe that they should never have formed part of this court case.”

Further delays had resulted in appeals for the intervention of The Prime minister David Cameron before legal aid was provided.

An embarrassing development at the inquest

As the inquest proceeded this month, it emerged that Thomas Cook had received compensation from the owners of the hotel. At the same time, the company sent a letter ‘saying sorry’ to the parents who had themselves narrowly escaped death in the original incident. The parents claim they learned of the letter from journalists covering the story.

“We are all deeply shocked and saddened”

I have not [yet] been able to read the letter. The company is refusing to comment further, although through a spokesperson has announced how deeply shocked and saddened the company remains over the tragic events.

Questions for students of leadership and CSR

Can you ‘read’ the story in terms of dilemmas facing Thomas Cook and its leadership?

What might have been unintended consequences of the decision to remove Harriet Green as CEO?

How might you as a new CEO dealt differently with the emerging story?

Why?

To be continued


Blair blow by blow. A collaborative review

September 3, 2010
US President George W. Bush, UK Prime Minister...

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When Tony Blair’s biographic account of his Premiership was published in September 2010, it attracted enormous sales and instant comments.  Leaders we deserve offers an extended collaborative review sharing observations about the leadership issues which it raises.

September 1st Tony Blair’s A Journey is launched with global publicity.  Instant comments appear regarding the 700-page book, some even trying to sound as if the book had been read …

Susan brings home a copy for me.  First glimpse inside. Seems to be written in a chatty style.  Is he chatting to me?  That’s rather a creepy notion.

September 2nd Book breaks publishing records in UK for non-fiction (in the old sense of the word non-fiction).  Early observation:  brief mention of his father early on was interesting … ‘ [Dad] was secretary of the Glasgow Young Communists; then to war as a private, ending as acting major and Tory ..became an academic, a practicing barrister and then an active Conservative’ [p7]. The narrative hastens on to young Tony celebrating the election victory that was to make him Prime Minister and where ‘I saw my dad.. realising that all his hopes could be fulfilled in me.’ [p11]

A lot in a single paragraph.  The p7 material is factual. So it’s a good platform to build upon. It has the feel of the profile of a driven high-achiever who might become an entrepreneur or maybe a business leader.   The p 11 material is highly interpretational.  At very least it is worth another few lines of reflection of the conservative father and one time communist whose dreams were going to be fulfilled by his son (who will go on to help create a radical ‘new’ labour political perspective.)

September 4th Destiny and mythology

We don’t have to believe this story.  We only have to it examine it for the narrative that the author would have us believe. That is step one of a process which metaphorically is studying a map.   If we stick to the metaphor, this particular book tells from its very title its intention to tell of a journey.  Which suggests that we are in the realm of myth-making.

It has been suggested that there is one archetypal myth of a journey, retold since ancient times in cultures around the world. We will re-travel to story of the hero leader departing on a quest or mission, overcoming dangers, and returning having fulfilled what may be seen as a pre-destined role.  The journey may or may not bring contentment.

Blair addresses his journey directly early in the book.  He tells of becoming aware of his destiny, moments of revelation.  The impact of his first visit to Westminster and the Houses of Parliament was one such revelatory episode.  There were several critical incidents each of which ‘told’ him that he had no other course than to claim his rightful place as leader.  The destiny was explained as requiring him to seize the moment.  As in, for example, Shakespeare’s treatment…?

September 5th Dublin, Demonisation, and Respect

The book is creating its own story, as its author continues a promotional tour.  In a Dublin book-signing there is evidence of demonization in a large anti-Blair demonstration continuing the anti-war anti-Blair protests.  However, as The Guardian points out, there were also supporters of Blair who had retained a positive view of his contribution to the extended peace process in Northern Ireland.

September 7th

‘A touch of the coggers’

I am beginning to see how TB presents himself as having unshakeable self-belief. It’s through a process which psychologists call cognitive dissonance. One colleague of mine would say he might have ‘a touch of the coggers’.

Human beings generally can deny the existence of unpleasant evidence which challenges self-esteem. Their reflective processes are curtailed, and this state of denial is a psychic protection mechanism. The example which suggested this possibility is the account [p 88 on] of TB’s decision to send his children the a ‘good’ school rather than a neighbourhood school. These sorts of decisions are seen as presenting dilemmas for some parents. Not Mr Blair. However, the decision of Harriet Harman to send one of her children to a grammar school was ‘shocking’, although TB considered it morally justifiable if politically dangerous. During the account of this episode Tony Blair suggests that opposition to these views by traditional labour supporters as coming from beliefs (which, he adds in parentheses, might be called prejudices).

When I ask managers about their actions and rationale, sometimes their reasoning makes sense. Other times, I am left wondering whether there are less than rational forces contributing to the case being made. In other words, there might be ‘a touch of the coggers’ about it. An isolated incident is not much evidence. There’s a long way to go in the book for testing the idea.

Reader’s Comment:

“In my view, Blair is a Hitler-type nutter. Give him a decade of unfettered power and he would have been very dangerous (His personal ideas/beliefs are more important than reality). He claims that Brown is an analyst without the ability to relate to people but the evidence is that he, Blair, is the exact opposite. “

September 8th: Clause 4 and the Power of the myth

The textbook Dilemmas of Leadership has a chapter about symbolism and why myths are important in leadership. Reading another chunk of TB’s book supported the view that he reached decisions through the lens of a symbolic leader, which is another way of saying that he has a style which involved symbolic thinking and acting. The style is prominent, even when it is contained within some narrative which is closer to the rational treatment of someone with legal training. (Unanswered question yet: how might private conversations between Tony and Cherie go? Will we get any hints later in the book? Or will this remain strictly off-limits).

His willingness to take on Clause 4 is outlined in a highly symbolic fashion. Clause four is labour party short-hand for its historic commitment to public ownership. The identification of it as a target for change is an act of creative leadership (creative destruction for the traditional labour party activist). TB describes it is an icon that has to be smashed (although he is also aware of the need to approach the symbolic act with the greatest caution and heightened awareness of the consequences. His public announcement at the party conference and was crafted as the importance of re-examining the hallowed mythology of old labour in the interests of the emerging New Labour movement he was bringing to power. The myth-makers of Hollywood recognise the grand myth, the battle of the forces of light and darkness (For Tony Blair read Indiana Jones, or Superman).

September 9th The People’s Princess

The death of Princess Diana has become regarded as a defining moment in British popular culture. The widespread public displays of grief were seen as untraditional. Tony Blair’s interventions were considered significant in several ways. It was reported that he recognized a mood of hostility towards the treatment of Diana by Royal family prior to and immediately after her death. TB suggested more public gestures of mourning particularly by the queen. In the book, he recounts his sensitivity to taking a high-profile role and risking being seen as presumptuous (Lèse majesté?). Here as elsewhere he is convincing in his insights to the symbolic impact of leader’s speech, including that of his coining of the phrase The People’s Princess.

He sketches briefly his feelings towards Princess Di.  Elsewhere, he provides several brief pen pictures in emotional terms. Even the eventual antipathy between himself and Gordon Brown is referred to as a kind of love gone wrong. Other similar declarations of love can be found, mostly of a Christian kind of brotherly rather an erotic kind. Here, describing his feelings towards the glamorous princess, he notes Diana as someone he ‘liked’. [Comments?]

To be continued …

September 11th: Anniversary of the World Trade Fair bombing

How did TB describe the events of 9.11? Did he have the same feelings of dislocation and disorientation that appears to have been widely shared by others? To a degree [chapter 12], but his account is clumsily written for someone with his instinct for the impact of his words. He does briefly convey his emotions, but in preamble, he sets the context with his visit at the time to a highly forgettable visit to a Trades Union Conference which is described with misplaced assumption that readers share the author’s enthusiasm for what Tony did next. [‘The great thing about Brighton is that it is warm…’, followed by a brief paragraph in which I counted 11 uses of the first person singular pronoun.]

How did he feel on first learning of the attack? ‘I felt eerily calm despite being naturally horrified…Within a short space of time I ordered my thoughts..it was for a battle for and about ideas..it came with total clarity, and stays still.. as clear now as it was then.’

The chapter quickly becomes a justification for war in Afghanistan as a moral and strategic imperative. His speeches at the time have impressive clarity, and convey what now seems to be an unshakeable belief in the rightness of his judgement.

September 13th Blair’s leadership style

By chapter 10, Tony Blair’s preferred leadership style is clear. For his closest aides, the principle is a preference for control, with the alternative of delegation of clearly-set responsibilities. It is close to the fundamental principles of scientific management, and still retains significance as the simplest means of crisis management. It has a great deal of face-validity. I have heard such principles offers as precious ideas from captains of industry (armchair Generalship?). Tony Blair has undoubtedly heard and been encouraged in his beliefs by his wide range of industrial contacts, and maybe a few old-style military acquaintances. He notes ‘at crisis time forget delegation forget delegation, that’s the moment you are there for (p294)’. Unfortunately for AB, and perhaps many others around the world, it is a hopelessly inadequate set of beliefs for developing trust and motivation among staff and colleagues under many circumstances. ‘What they teach’ about leadership at Sandhurst as well as Harvard is delegation not of tasks but of responsibilities to act, and with the bonus of trust in the relationship with the leader. Mr Blair does not seem to have taken on board such views openly shared by military figures such as John Adair on action centred leadership, or more directly accessible the views of Admiral Lord Mike Boyce who became chief of his Defence Staff. These more nuanced approaches suggest that delegation and development prior to a crisis means that more people are willing and able to take effective undirected actions.

September 15th 2010:  Iraq

The book builds up to Tony Blair’s role in the Iraq conflict.  What can now be established that had not been established before? The twelve preceding chapters had established a pattern in the narrative which might be expected to be retained.  In general TB writes and speaks in absolutes.  It is hard to challenge the assumption that he believes in absolutes, in right and wrong answers, in good and evil.  He also writes ‘outwards’ from events in which he is presented as the dominant character.  And his reasoning tends to be surprising loose for someone who prides himself in the benefits of a legal training.

For many people, the fundamental questions are around the decisions of his Cabinet (presumed to be decisions taken primarily by himself) to commit Britain to the Iraq War.  Secondary issues are whether he had been excessively influenced by George Bush in taking these decisions.  To a degree, the pattern he outlines in earlier chapters may be a good starting point for understanding these two pivotal ones. 

Map Testing the Blair view of Iraq

My attempts to understand the Iraq story is based on the process I recommend to leadership students.  Analyse by first looking for a Platform of Understanding of any text (a book or even a situation).  The narrative here has a primary narrator.  Maybe we can find a shared belief starting from his perspective.  For example, he suggests that his involvement in the Iraq conflict led to such a deline in his popularity that many people disliked him, and some loathed him.  He further claimed that a hostile press contributed to the public’s mood against him.  He also claimed that public opinion was turned against him to accept evidence that he was dishonest in his treatment of issues (particularly over the existence of Weapons of Mass Destruction in Iraq).   

I find I can share this as an indication of Tony Blair’s map of the decline in his popularity.  We can test the map in various ways.  For example, we might note earlier in the book his observation that a leader may have to be less than honest with others.  That certainly a can be leadership dilemma. But he also notes that the war in Iraq divided public opinion.  The Press may have been tapping in to a public mood rather than creating one.

September 16th: Is Tony Blair a habitual liar?

After close reading of the book, I don’t think that Tony Blair believes that he is a liar in the way many believe to be the case.  He has a intuitive way of reaching conclusions, and finds it easy to back-rationalise from them.  In this respect he is in denial over contrary beliefs.  Having decided that Bill Clinton is a particularly ‘good guy’, he justifies the Monica Lewinski affair in a remarkable bit of special pleading which amounts to his observation that Bill was deeply interested in and curious about people.  That might be compared with Clinton’s own piece of denial to the effect that he “never had sex with that woman”.

One explanation is that Blair and Clinton have beliefs that are filtered through a special way of seeing the world which some would say is misguided at times.  Some would detect evidence of narcissism, and which in Blair’s case verges on megalomia.

September 17th: A note on megalomania

I leave clinical colleagues to arrive at more informed views of megalomania. I recall the psychoanalytical treatment of political leaders by by Leo Abse in this respect.  As a matter of fact, in checking for this note I was reminded that Dr Abse, a former Labour MP had written psychoanalytical texts both on Margaret Thatcher and on Tony Blair

The clinical diagnosis of megalomania refers to a form of mental illness characterized by the unreasonable conviction in the patient of his own greatness, goodness, power, or wealth. The non-clinical definitions seem to characterise someone who an obsession with doing extravagant or grand things. http://www.thefreedictionary.com/megalomania

Bertrand Russell observed that megalomania is found in lunatics and among many of those who achieve greatness.  Alexander the great is often cited in this respect.  There may be actual achievements but the mental condition becomes delusional.

Comment

From Jeff Schubert:
I seem to remember that Blair often said something like “people need to understand…” This always struck me as the words of someone who “knew” that he was right! Does this phrase get used in the book?

Think I see where you are coming from. Someone want to do a “people need to understand” count?
Relatedly, he does from time to time go on about other people don’t get it [“I couldn’t get Gordon to see it.” p569]

September 18th The London Tube Bombings

Blair cut short his attendance at the G8 summit in Scotland on news of the London Tube bombings. He entered the role of speaking to and for the nation “thinking how we should respond..this wasn’t about ‘emoting’or ‘empathising’ as people often stupidly and cynically say..it is about defining the feeling so the reactions can be shaped and the consequences managed. (p508)”

The quoted paragraph is worth careful study. Comments welcomed. He feels strongly when described as emoting or empathising. Don’t quite understand why, but TB sees these terms as perjorative, and indeed used by stupid and cynical people. Revealing is his implication that his speech acts at such a time do capture the public mood and shape future public beliefs. It is one view of a leader’s role. Maybe as Jeff Schubert suggests [above], TB wants us to understand, just as he wants the nation to understand.

Bush and Blair

So much has been written on the Bush Blair relationship What new might be suggested? The book offers what TB chooses to present. We find his belief about what is important. This seems to be that Blair trusted Bush unconditionally. (Why is a more complex matter). TB acknowledges that most people find it strange when he rates George Bush as someone of utter integrity and higher than most other political leaders we has met. Why? I have a suspicion that the answer lies in the nature of trust (defined as a vulnerability to accept positive intentions of another). Blair, who someone talks of the lonliness of ther leader still needs someone in whom he can trust. For a special person like himself, it has to be another special person who has attained high office. It’s a fascinating thought to consider how encounters between two such powerful and intuitive persons might turn out. But don’t expect rational explanations. It occured to me that little has been written about encounters between two such personalities. Blair had a charismatic effect on many people; Bush has the more commonly accepted charisma associated with great power and wealth. For Blair it was an deep emotional experience described in terms of an adolescent crush.

A milder version of this intutive admiration for a powerful and contraversial individual is the case of Sylvio Berlusconi (p 552). In each case, the enthusiasm of his descriptions is accompanied by what amounts to a statement which can be read (at least by me) to the effect that most ordinary people might be able to appreciate the special insights by a special person into special persons.

September 20th Toughing it out

Tony Blair’s style switches from chatty to formal, from persuasive to descriptive.  In this chapter I finally got it (to use a Blairism).  He’s writing in the first person heroic in one of Jeffery Archer’s novels.  “I was trying to wear [psychological] armour which the arrows simply bounced off, and to achive a kind of wightlessness that allowed me, somehow , to float above the demonic rabble tearing at my limbs (p573)… I had complete clarity about what it was I had to do. I really did feel absolutely at the height of my ability and at the top of my game…[although my popularity was at its lowest] there was a residual respect for and attachment to strong and decisive leadership” [Comments welcomed].  

A summing Up 

The extended review touches on aspects of TB’s behaviours which are less than admirable. A little more might have been said on substantial changes for which he can claim credit. There is little doubt that his leadership did make a difference to a labour party which had seemed unelectable until the late 1990s. His energy and ideas brought into being the New Labour movement as well as reforms he would himself claim as progressive (one of his favourite terms often applied to himself). Historians among others will find something of interest in the book.

I found it tough going. One of the saddest notions is his division of people into those with open and closed minds. Sad because it is not difficult to put Tony Blair in the category he dispairs of. He was, when in power noted for great senstivity to mood, and a capacity to capture it. This skill is here revealed as not unconnected with insensitivity to the impact his written words may have on large swathes of readers. (Or maybe I’m being guilty of the same intuitive sense of being right in unclear circumstances). With taht caveat on how convictions may trump analysis, here are my conclusions:

[1] Tony Blair believes himself one of the leaders of the world’s progressives

[2] He “gets it” on big issues: World Peace, The Broken Society, The Economy, The Future of the Labour Party, Leadership, Islamic fundamentalism

[3] He is deluded in his view that his training as a barrister has gifted him a keen analytical way of analysing of complex events. His aguments often are loosely constructed to arrive at the conclusion he wants to advocate

[4] The boundless self-confidence conceals deeper insecurities and a need to be loved and seen as someone very special in the eyes of the world

[5] The book may have been written with the belief that Tony Blair’s Messianic aspirations have not entirely gone away.


Toyota Fights to Preserve its Global Brand

February 4, 2010

Toyota faces its biggest crisis over a serious weakening of its reputation for quality control. How might creative leadership preserve its global brand?

Toyota has been hailed as the company of the future. This site has made no secret of its admiration for the company’s success. But events are now suggesting that the company has a lot of work to do in preserving its global brand. A year ago we wrote [Jan 2009] that Toyota’s business model was on trial:

Toyota is hurting, and Company chief Katsuaki Watanabe recently announced a projection for a first annual trading loss in its seventy year history. But Toyota’s pain still seems likely to be more sustainable than that being suffered by its rivals, whose fate is one of the urgent problems facing incoming President Obama, and who are pressing (begging?) for state bale-outs. For Chrysler, and GM, job losses are inevitable, while even survival in their present state seems increasingly unlikely. Its reaction to over-supply is to announced a temporary suspension of production for 11 days [Feb-March 2009] in all its 12 Japanese production units.

Now, [Jan 2010] Toyota is experiencing one of those crises which can rock a company to its core. Shares plummeted, as the company prepared to recall eight million vehicles globally because of problems with accelerator pedals on seven models.

At a Congressional hearing on Wednesday, [Feb 3rd 2010] US Transportation Secretary Ray LaHood alarmed both investors and consumers with the advice, which he later retracted, that owners of a recalled Toyota should “stop driving it”.

The carmaker said it was not aware of any accidents resulting from the issue and that only 26 incidents involving accelerator pedals had been reported in Europe. Last year, Toyota was forced to recall about 5 million cars worldwide over problems with floor mats trapping pedals. END
Toyota’s UK spokesman Scott Brownlee denied that the firm had delayed the accelerator pedal recall in the UK, stating it was a quality rather than a safety issue.

The Perrier Story

The developing story, although potentially far more significant has echoes of the Perrier case.

This relates to the crisis faced by the Perrier brand in the late 1980s. John Mowen & Michael Minor in their text book on Consumer Behaviour explain what happened

Perrier Group of America announced a highly embarrassing product recall [February 9, 1990]. The recall came in response to a report stating that Perrier’s high-priced bottled water was contaminated with benzene. Even though the U.S. Food and Drug Administration (FDA) said that the benzene levels did not pose “a significant short-term health risk,” Perrier’s management requested the removal of the brand from supermarkets and restaurants in the United States and Canada.

The incident turned into a public relations disaster, in large part because the company’s explanation for the recall kept changing. After traces of benzene were found in Perrier bottles in other parts of the world, company officials altered their original explanation. Benzene, they now said, is naturally present in carbon dioxide (the gas that makes Perrier bubbly) and is normally filtered out before the water is bottled. For unknown reasons workers had inexplicably failed to change the filters. Meanwhile, Perrier still insisted that its famous spring in Vergeze, France was unpolluted. By 1995, Perrier sales had fallen to one-half their 1989 peak. The company had to mount a comeback strategy. While attempting to regain share for the Perrier brand through new distribution channels, the company began to invest in other brands that did not have the Perrier name attached to them. The question remains, however, will the memory of the benzene incident forever tarnish Perrier brand name?

Lessons for Toyota

In times of corporate crisis, Denial is still a likely response. What might Toyota do to avoid the dangers of permanent damage to its future as a brand? Can lessons be learned from the fate of Perrier? What steps might a creative leadership take?

Acknowledgement

With grateful thanks to Susan Moger for her insightful comments on this story.