By Sunday 29 September, Operation Matterhorn – the largest-ever repatriation of UK citizens in peacetime – had brought back 93,000 people from a variety of tourist hotspots, according to a statement from the Civil Aviation Authority (CAA). [1] The mission was launched following the abrupt collapse on 22 September of travel firm Thomas Cook – a corporate meltdown that led to the immediate cancellation of numerous return flights, leaving thousands of holidaymakers stranded.


In the announcement, CAA chief executive Richard Moriarty said: “We have returned a further 15,000 Thomas Cook customers to the UK in the last 24 hours, and have now used more than 100 aircraft as part of our Matterhorn fleet. Although we are proud of our work so far, we are clear that we still have more than a week of the flying programme to manage and nearly 55,000 passengers to bring back to the UK and we remain focused on that challenge.”


He added: “The scale and complexity of this operation will inevitably cause some inconvenience and disruption, and I would like to thank holidaymakers for bearing with us as we work around the clock to bring them back at the end of their holiday.”


Meanwhile, MPs are gearing up for a detailed probe of where Thomas Cook went wrong, with the Business, Energy and Industrial Strategy (BEIS) Committee announcing on 26 September [2] that it will thoroughly investigate the circumstances behind the company’s demise – although Committee chair Rachel Reeves hinted that it already has a few ideas.


She said: “Amid the frustration of holidaymakers and the misery of thousands of staff losing their jobs the collapse of Thomas Cook has uncovered what appears to be a sorry tale of corporate greed, raising serious questions about the actions of Thomas Cook’s bosses and their stewardship of the business. This latest corporate failure has shone a light once again on the use of aggressive accounting methods to aid bumper payouts to company executives and the apparent inability of auditors and regulators to curb these practices in the wider interests of shareholders, investors, and the public.”


In a further statement, Reeves added: “The public will be rightly appalled that as Thomas Cook mounted up debt and as the company headed for trouble, company bosses were happily pocketing hefty pay packages.” [3]


What sort of governance lessons must leaders take away from Thomas Cook’s collapse?


The Institute of Leadership & Management’s head of research, policy and standards Kate Cooper says: “I would be rather intrigued to know what went on in the company’s senior management meetings. It’s difficult to believe that Thomas Cook knew they were misleading themselves, their investors and their employees. Perhaps they were simply measuring the wrong things, or looking for evidence of bonus-earning levels of performance that, in the end, proved fatally tenuous.”


She explains: “The firm’s business model could be summed up as something like: ‘Providing great holidays at a price that exceeds the cost of delivering them.’ That’s the bottom line. Whether they were drawing comfort from customer-satisfaction surveys, rates of room occupancy, the number of empty seats on flights or how many covers of people they’d been able to serve in specific timeframes, the measurements were unlikely to have been holistic, or anchored to the underlying business model.”


Cooper notes: “In our next blog, we will be looking at the example that Greta Thunberg has set as someone who thinks outside the box. But we can readily apply that theme to this piece, too. One of the main arguments for diversity is that you want people who aren’t part of the groupthink bubble. Indeed, organisational behaviour guru Dr Meredith Belbin would say that any team that doesn’t have a ‘moderator-evaluator’ in its ranks – a critical voice who can ask questions like, ‘What’s really going on here? How do we know that? How can we be sure we’re worthy of bonuses?” – can easily convince itself that it’s doing a great job. Particularly if it’s a busy team that’s working diligently to serve the sorts of metrics I’ve mentioned above.”


She adds: “Adhering to your business model is ultimately how you deliver success. And if you’re not delivering, then either your business model is flawed, or your operations are, and it’s time for a rethink. Having diversity on your senior team in the form of a scrutineer who can assess whether or not your firm is upholding its core values – which in Thomas Cook’s case were Service, Quality and Reliability – provides an instrumental gauge for business-model and operational efficacy.”


For further insights on the themes raised in this blog, check out the Institute’s resources on delivering outcomes


Source refs: [1] [2] [3]


Image of Thomas Cook jet courtesy of gopixa, via Shutterstock


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