Thomas Cook is up the creek with no available paddle. Their management team had a number of very good paddles but their CEO threw them all out of the boat 10 yards from the bank. So now they're drifting towards the rapids. It's likely they will be smashed to bits on the rocks, leaving only the battered carcass of a company. Where did they go wrong? Why did they go wrong?
Thomas Cook was founded in 1841. Since then it has weathered the storms of the travel industry and today Thomas Cook Group plc has sales of more than £8.5 billion. Despite these monster revenues it appears that the company cannot afford decent PR advice - or if they can, they have chosen to complete ignore it. When two young children died of carbon monoxide poisoning in an apartment the family booked through Thomas Cook, the company clammed up.
Last week the inquest jury found that the children had been 'unlawfully killed' and that Thomas Cook had 'breached its duty of care'. It also emerged that the Thomas Cook has received £3.5m in compensation from Louis Hotels, the owner of the holiday resort. But they had passed on only about one-tenth of that to the grieving family. Up until a couple of days ago there was no attempt at an apology to the family. Just a much delayed acceptance of the family's pain made not to the parents but to the media. Disgustingly too little - much, much too late.
Now crises don't come any bigger than this. And it's truly remarkable that Thomas Cook didn't spot that the instant they were told the children had died. The impression given to date is that they hoped it would all go away. When it didn't, they listened very carefully to their lawyers who no doubt reeled off a hundred reasons not to say sorry. Sometimes, the lawyers are right. Sometimes saying 'sorry' straight away is not a good idea. But this is not one of those times.
Thomas Cook made a fatal mistake. They regarded their lawyers' advice as more important than anything else. In all global companies, it's the CEO who sets the tone and steers the company attitude. So I think it's reasonably safe to assume that Thomas Cook's CEO is not a big fan of PR. I would not be surprised to find that he believes PR is just for the nice, happy things in life; for the times when you win awards or launch a new product; for when you create a strategic partnership or make an acquisition. That's right - PR is just there to write press releases and look pretty.
The CEO clearly doesn't understand PR but he's not alone. He has joined that happy band of CEOs who dismissed PR as a nice little add-on and paid a heavy reputational price. He is the next Tony Hayward, the BP CEO who described the catastrophic Gulf of Mexico oil spill as 'tiny' and then went on holiday. Like so many CEOs he ignored the PR guys screaming 'apologise now!' and consequently, Thomas Cook's reputation is in tatters - and so is his. The media is savaging them and people are vowing to never book a Thomas Cook holiday again.
Many CEOs fail to understand that when it comes to a crisis, inaction and lack of communication cause much more damage than fast action and speaking out. And it almost doesn't matter what the details are. This is where companies mess up. They do one of two things: immediately try to justify their actions, reeling off dates and facts, when actually, no one cares, especially the victim and the public. Or they clam up and bring in the lawyers. Both of these avenues are highly destructive. The only way to start and to have a chance of moving forward is to act fast: say sorry, mean it, make it clear that you're going to kick ass all over the company and beyond, and put procedures in place so something like this never happens again. The only way to do this effectively both in words and actions is for the CEO to ditch his ego - and his lawyers - act like a human being and do a Japanese-style bowing apology.
Sadly for Thomas Cook this didn't happen. A family has suffered an unbearable loss and Thomas Cook is teetering on the edge of destruction. This is not a situation that will disappear for either side. The only way to try to rebuild Thomas Cook's reputation at this point is to come clean; for the CEO to stand up and say I made a terrible mistake. I am very sorry. And resign.Suggest a correction