Better to go fast and get it right 80% of the time than to go nowhere.
Digital enhancement is an increasingly popular way to future-proof a business. At Virgin Experience Days, the acceleration of digital capability has reaped tremendous benefits. In particular, the focus towards mobile and a personalised customer experience based on a flexible, cost effective and best-of-breed technology infrastructure has delivered a significant impact. “When I joined we did not have the speed or focus on technical innovation,” says Richard Hurd-Wood, CEO of Virgin Experience Days. “By having an effective in-house user interview/experience and development teams working towards clear goals and with the insight of first-rate data analytics, we’ve been able to deliver accelerated growth.”
The company is also using Blue Prism software to improve operational efficiency at VED. Richard explains: “We are using robotic process automation, that is virtual robots, to replace often complex manual processes. In terms of processing speed and efficiency, the changes have been very marked, meaning that we can re-direct our people away from repetitive processing tasks and towards delivering excellent frontline customer service.
Other methods may be less obvious, such as trying to envisage your business in five years’ time.
“When I took the helm, the business looked nothing like it did at exit,” recalls Simon Russell, Chairman of Vivona Brands between 2014 and 2015. Indeed the business was called NPW when management partnered with Inflexion in 2012, and was a giftware business focused on the UK. In what he coined an ‘adventure’ of a journey, much of the business underwent change to ensure it could be future-proof in a time when many retailers were struggling with the pace of change. It evolved into a health, wellbeing and beauty business, with a strong focus on K-beauty. This meant that Vivona products appealed to millennials and gen-Zers, which mostly want instant gratification and display little to no brand loyalty. This meant the business needed to prioritise speed: “We develop products from concept to shelf in 14 weeks. That pace was fundamental to the business’s success,” Simon explains.
Eventually the business saw its UK focus shift to a global one, selling into 80 countries and generating around 85% of its revenues from overseas. This is a tremendous feat for a business turning over less than $50 million. “Only when we started considering the exit process did we really get a feel for what needed to be done,” Simon reflects.
Simon’s sentiment on exit as a core focus is echoed from Richard Segal, who served on the board of On the Beach for five years from 2013 to 2018. “Every CEO, soon after their business is acquired, should spend time creating the first page of the IM for when their business is sold next time. This is the summary page that describes the business they want to be selling in three to five years’ time.”
Richard admits the goal at On The Beach was ambitious: “we wanted to become bigger than Thomas Cook, who, at the time, were some 12x larger than On The Beach. We believed this was achievable given On The Beach had a stronger customer proposition, a superior business model and far better technology”. Richard Segal said it was evident in 2013 that Thomas Cook had a model doomed to failure; it was simply a matter of timing. “Back in 2013, On The Beach was focused on building an agile, personalised, digital customer experience, whilst Thomas Cook, which wasn’t sufficiently focused on the future, was still printing brochures and serving customers through a large chain of high street travel agents.”
On the Beach’s investment from Inflexion coincided with an acceleration in the market shift to booking holidays online, and so management and the backers set to work building partnerships with hoteliers and investing in technology, digital marketing, brand advertising, direct contracting with hotels, customer service and international expansion. Online traffic to On The Beach grew rapidly and, through a rapid rate of test-and-learn, conversion rates improved steadily.
During the 23-month partnership with Inflexion, employee numbers at On The Beach doubled whilst EBITDA grew up 50%.
The management team at On The Beach, supported by the Board, had great clarity of how they wanted to see the company grow and develop, says Richard Segal. “By having an ambitious plan and a clear vision of the business they wanted to be selling in the future, they were able to pull the correct levers and execute at speed; and by so doing delivered impressive results and created shareholder value.”
At Vivona, success was all about pace. “Better to go fast and get it right 80% of the time than to go nowhere. If you think you’re going fast, go faster,” Simon advises.