Disruption leadership challenge

In my last article, I focused on the small non-digital operator and what they need to do to get up to an essential digital level to allow them to have a chance of survival. This article will focus on the Developed Digital Tour and Activity Operator and how they can avoid being disrupted and hopefully transform themselves into the high growth disruptor.

The change required for these operators is extensive, complex and exceedingly difficult, which is why most will not attempt it until the market forces them which is a bit like turning up to the party as everyone is leaving. Those that do try it will have an exceedingly high failure rate. I am just full of good news!

The incredible speed of change in the marketplace driven both by societal changes and technology mean that many of the leaders in these established businesses are unprepared for the digital environment we now find ourselves trying to navigate. It is not surprising they have serious companies to run and to find the available time and resource to be up to speed with the change that is happening is near impossible for them. However, not enough time is an excuse, and as a leader responsible for business and people you have a duty to be on top of this.

The business model options facilitated by a nearly endless range of new technologies is swamping leaders, and many do not have the strategic plan in place to help guide them through. As they are scratching their heads the expectations of their customers, employees, partners are rising at speed. Clever, digitally native businesses are winning over their customers and keeping them!

Tour and Activity operators who have done well with digital adoption so far now have to get their heads around a wide range of disrupting technology and the likely impact on their business. Artificial intelligence, Machine Learning, Social Media, The Cloud, Automation, Autonomous Vehicles, Big Data, Internet Of Things, Blockchain, Wearables, AR/VR mobile are all going to have an impact and my head hurts just writing that list out nevermind working out the likely impact and the opportunities and threats from each.

Today I see Tour, Activity and Attraction operators underinvesting in digital technology and marketing. They focus much more on the product and service that the guests experience when they are with them, and that is understandable. However, I believe that the same level of focus and dedication needs to be invested in guest engagement, guest acquisition and retention and post-experience management.

I am a believer in learning from others who are World class at what they do, and the OTA’s are laser-like focused on engaging, acquisition, and retention management via technology. Operators have to learn to do the same at the same time as delivering fantastic experiences and services. This is a huge challenge and should not be underestimated.

The OTA’s have travelled this road before with hotels so they will double down on efforts and investments to engage with tour and activity guests at all possible online and offline touchpoints in the guest experience journey which results in winning relationships and in this fast-moving digital world relationships are the only thing with any true, long-lasting value.

Always remember though creating a digital transformation strategy that has a chance of succeeding is all about people, culture and organisation first and foremost. The technology is just the facilitator of the changes that need to happen. Culture and people first and always.

Six questions developed operators in our industry have to ask and be brutally honest with themselves are

1. Do we have the leadership talent in the business that combines high-level business knowledge combined with the ability to format and implement digital transformation strategies that work with agreed business-wide objectives and outcomes?
2. Do we have leaders who can look outside the Tours, Activities and Attractions domain and see where the change and disruption are likely to emerge?
3. Do we have leaders who can be confident enough to take on the considerable barriers to change? Do we have leadership who has the personal skills to lead the people through cultural and organisational minefields?
4. Do we have leaders that believe that travel and activities can be a force for good in the World and how we lead our guests on travel and activities matters?
5. Do we have leaders that understand that in the age of disruption we have to do good for the environment and our guests at the same time?
6. Do we have leaders that understand we will be judged by what we do not by what we say by today’s guests?

This style of leadership required is new and a mix of previous leadership roles. The demands of these leaders will be enormous. It is like going into battle knowing the odds are stacked vastly against you. However, it is more dangerous to go into battle ill-equipped about the environment you are operating within.

We will now assume you have the leadership in place and you are going to attempt a digital transformation of your business. What are some of the first actions?

Make sure you are all in

You have to bet the house on this; it cannot be a side project; it will not work if it is. Significant leadership and financial resource and needs to apply to this.

It would be best if you targeted the new business model to get 15-20% of revenues as quickly as possible as this will help ensure the buy-in of the doubters who will be many and loud. You need to spend big on this; if it has a small budget, it will fail. If it does not have top-level leadership, it will fail. If it is not communicated from the leadership with passion and belief, it will fail.

Understand your marketplace and the threat to it from potential disruption. A lot of work and effort needs to be applied here because if you do not understand the danger, you cannot do anything about it. Also if you do not understand the threat and the disruption that it posses, then you will struggle to find the opportunities. A preemptive strike is better than reacting to what others do. However, because businesses are run by people and people, on the whole, are reactive the vast majority of the companies in the Tours, Activities and Attractions sector will spend most of their business life reacting to industry changes instead of making the changes.

Timing matters, to early and you can burn money and get no returns. To late and someone else has stolen the market from you. Very difficult to do this but it really does matter to get the timing right. Again strong leadership required as tough decisions need decisive leadership.

Not all transformations are focused on revenue-generating activities; many are focused on saving money in traditional business structures. However, if this is the case, I suggest that the money saved needs to be reinvested in revenue generation transformations as these are the transformations that capture market share and growth. Cost saving improves the bottom line temporarily.

The CEO and the top team need to be 100% bought into the transformation and be advocates at every opportunity. Without this level of support and advocacy, the transformation attempt will harm the team and the business.

Intelligence. 

You need to gather it and fast. You need to be studying the market for trends and any hint of changes. You need to be continually researching new technologies and asking is this a threat or is it an opportunity, it is often both. Ensure you gather your intelligence broadly not just from the travel industry, the most dynamic disruption to travel will come from outside the travel industry. Match your value drivers with trends like customer behaviour and demand changes. You have to be customer driven at all times and customers are changing.

Your data will be a great source of identifying intelligence of changes if you have the tools and skill set to interrogate it.

Awareness.

The phase where you bring all the intelligence gathering to bear, and you start to understand what all this confusing technology and changing behaviours you gathered actually mean.

• a. Are old ways of doing business being less productive?
• b. Are profits from products starting to decline?
• c. Which new business models in the industry and in other industries are gaining traction and fast growth?
• d. How are the needs and demands of customers changing?
• e. What is the risk versus reward looking at the various opportunities and threats?
• f. How will Tours, Activities and Attractions evolve over the next one, three and five years?

I am not sharp enough to say what it is, but something will be lurking soon that will be totally unexpected and will impact the whole industry.

The objective at this point is not to develop a strategy and plan it is to understand the environment that your business is operating in today and going forward and the others who are impacting on that environment. You are looking for opportunities and trying to identify and avoid the things that will hurt you.

This looking at the horizon and beyond is not comfortable, and one person can not do it. It needs a leadership team that can take in all these different scenarios without bias and work through the many choices available to find the advantage.

Make your mind up.

Taking all the intelligence, you gathered all, and all the awareness you applied to it is now time to create the strategy and the plan.

1. Create a plan to communicate the strategic purpose to the organisation. It may be two messages internal and external. One is better.
2. What part of the future Tours, Activities and Attractions does your organisation want to own?
3. How will your organisation go from where it is to where it is going?
4. What changes in the operations of the business will it take to make this happen?
5. What is the target market and what is the customer persona in that target market?
6. What are the organisation’s value propositions that will capture these customers and market
7. Make sure the people involved understand the clear strategic direction so that they can bring this to everyone they speak with. Fast and hard on this, it is not time to do a slow liner role out.

Execution. 

The strategy needs to be executed rapidly. Do not slowly roll out over the years. This will involve lots of testing and failure at a tactical level but always keeping the strategic intent at the front of the head. The multiple projects need aligning with the objectives of the business. Teams need to have the freedom to fail and learn and go again but at all times be aligned.

Wasted time and effort is a significant danger at this stage, so everyone needs to be aware, and any conflicts that arise from constraints and resources need to be tackled head-on and resolved and not allowed to fester.

Find simple messages of communication to aid this battlefield of action.

Example

Does it help us grow? = Do it and do it fast

Does it not help us grow? = Do not do it

Why did I use growth as an example? Have you ever heard of a project failing because it grew the business?  If you are an ambitious business in the tours and activities sector, you are going to have to get very serious about growth as technology companies and many others are exceedingly serious about growth!

To stay ahead and have a chance of survival leadership needs to adopt the above not once but constantly, so it becomes part of the DNA of the business. Those that do it and do it well and fast will have a massive competitive advantage. An unrelenting focus on the customer value proposition with the operations behind it to change and adapt at speed is a barrier that few companies will be able to keep pace with. Standing still on a battlefield leads to death those that adapt at speed survive and thrive.

Leadership today in this digital era for Tour, Activity and Attraction companies requires the ability to disrupt your own business, and not many leaders like to destroy what they built. However, if you do not, others will!

Leadership has never been easy and it is getting a whole lot more challenging.

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