The Thomas Cook Affair

Thomas Cook, the UK Tour Operator, is a significant company with c£9bn of revenue and over 22,000 employees. Operating in a difficult sector, heavily impacted by global economic conditions and the relentless move of customers towards online booking, its Executive are used to wrestling with difficult decisions, charting a safe course through the choppy waters of the travel industry.

It's worth asking then, in the case of the tragic deaths of 7 year old Christi and 6 year old Bobby Shepherd in a Corfu Hotel, how could the company have got it so wrong?

What went wrong?

In 2006, the 2 children died of carbon monoxide poisoning in a hotel booked by Thomas Cook.  Whilst the hotel resort has been found to be directly liable for the deaths,  Thomas Cook has admitted that its health and safety audit of the hotel complex was inadequate.  This fact on its own is not, tragically, unique in the corporate world.  Unfortunately many organisations' do not invest sufficient rigour in their overarching duty of care, with box ticking soon becoming the norm.  

However, the most startling fact was the failure of Thomas Cook to show empathy and concern to the parents of the children, until events overtook them and the market forced them to be contrite.  Executives exercised their rights to silence, whilst the parents fought their battle to be heard.  After 9 years, Sharon Wood, the mother of the children, commented that the company's apology was "too little, too late" and that the company had demonstrated a "lack of human decency", stating "would anyone trust that firm after how they have treated us?"

Although the resultant apology, in the word of the family's QC, Leslie Thomas, was "sincere and heartfelt", in the inquest held earlier in May, the CEO, Peter Frankhauser, noted that the company had no need to apologise "because there was no wrongdoing by Thomas Cook". 

The Impact

It's too early to say what financial damage has resulted, although the immediate furore has resulted in a tangible drop in online searches, a Facebook campaign to boycott Thomas Cook and the loss of important advertisers.  However, whilst city analysts seem unfazed, the long term impact on the brand is bound to be significant, albeit unquantifiable.  

In a sector where the family market is crucial, Thomas Cook has too easily divorced itself from the brand values that this audience prizes: trust, compassion, and empathy.

So what do we learn?

All organisations need to learn some important lessons from these events.

1. A brand radar. At the outset, Thomas Cook should have realised that the death of two children at a hotel which the public would see as their responsibility needed careful handling.  This case was bound to stir up emotions and have the potential to damage the company's brand.
2. Legal protection. Being protected legally does not mean that all risks are being mitigated.  In this case, following the narrow legal perspective increased the Company's risks - alienating it from its market and creating an image that was counter to the one it hoped to project.
3. Shareholder value.  Short term financial value might have been protected by following the legal line but the long term shareholder value arises from building a brand that people want to engage with.
4. Corporate empathy.  Connection with the market is crucial and the best Executives are able to connect with their customers, shareholders and their own staff.  As a CEO, Peter Frankhauser, did not initially demonstrate sufficient empathy to the parents and potential customers, staff or observers, would have noted this, changing their behaviours accordingly.  In these situations, advocates become quiet, neutrals become critics and antagonists become terrorists.
5. Online power.  Ironically, given the Company's desire to increase its online business, Twitter and Facebook have been alight with "Thomas Cook" in a way that the company and staff would have hated.  It should have appreciated that their handling of these events would develop a momentum that was bound to build. The only way to counter this is through proactive online activity that recognises the concerns of the parents.
6. Genuine and timely communication. The absence of comment and the legal attempts to thwart the family's legal challenges, were a devastating mistake.  Whatever the legal position, showing genuine concern immediately could have diffused many of the subsequent impacts. Showing concern does not mean accepting responsibility, however saying nothing will always be viewed as being arrogant, disdainful and dismissive.

Chris Lorimer is an organisational consultant who has worked with a wide range of clients, helping them to communicate effectively to their audiences. He lives in Devon, UK, with his family.