Tammy Krings may be even more tired of hearing about the recession than you.
She’s not one to say that she’s had it worse than someone else, but the downturn came early for Travel Solutions Inc.
“The travel industry felt it very early, and we took a very quick view of how it was impacting us, and one of the things that we quickly concluded was that our business was down, obviously, and we looked at it by sector,” she says. “We looked at it every which way we possibly could.”
As the recession deepened, Krings, who is a CEO and leadership coach at the travel company she started and co-owns, had discussions with her peers to pick their brains about what actions they were taking. She was surprised to find most executives had the mindset of a cheap plastic surgeon: cut, cut, cut.
“I’ve talked with a lot of my CEO-level colleagues, and I would say, ‘What are you doing?’ and they would say, ‘Well, we did this,’ and I’m waiting for more, ‘What else did you do?’” she says.
“We went to great consideration to make a very comprehensive recovery-type plan before we needed it, and that’s why we did a very long list of tasks and initiatives to make those things happen, and most of my CEO counterparts were saying, ‘We’ve cut costs,’ and that is not a sustainable mode of operation. We were looking at a remedy that would be sustainable across a long period of time [and] that would also build up the disciplines of the business so that even in the good times we are lean and mean.”
While Krings took many different steps to help get the $645 million company through the downturn, the basic overview of the plan was to get her 160 people to understand what was happening and what it meant for them, take initiatives that moved the company forward and to make any cuts as quickly as possible so they could get back to business.
Get people on board
When times start to get tough, it’s well known that the complainers come out and start to kill morale. So you have to get out and let people know you’re still leading them and the fight is against an external enemy. That takes a degree of leadership, not management.
“Leadership and management I see as two different things,” she says. “You can have a good manager that is technically good at managing things, but the intimacy that you have to have with people to be a good leader needs to occur consistently and you need to be able to draw an influence across a wide behavior over groups of people.”
Drawing that wide influence comes in steps. But, good times or bad, you better start by being visible on a daily basis. But taking the next step toward getting people to trust you as a leader is tricky. When it comes to getting more in touch with people, many leaders start by asking about personal things, but Krings doesn’t go there. She wants to avoid generic questions to be more sincere, and she also doesn’t want what the kids call TMI: too much information.
“I do think a leader has to be very careful in what kind of intimacy they ask for from their folks,” she says. “So I will ask them things about how comfortable are you feeling in your role. ‘Do you feel we’ve done a good job getting you the right training; what’s missing that we could do to help you,’ and if they say, ‘Gee, I really need extra blah, blah,’ I say, ‘Well, have you told your team leader?’ And so now I’m saying to them, ‘You’re accountable for that,’ and if they haven’t [told their team leader], then it wouldn’t be unusual for me to call a team leader over and say, ‘Let’s have a chat about how we can help Suzy Q a little better.’ So they see an immediate response and that can also help to diffuse people talking about things that don’t matter.”
When times get tough, you have to further build that rapport by sharing details candidly.
“[What] we have always committed to our associates is that for anything that impacts them, they will know what we know, when we know it, and the message is as important as the timing so you can control any rumors, or in the absence of communication, they’re going to draw their own conclusion.”
But while being candid, understand that empathy, not sympathy, is what employees want.
“You can’t appear to be sympathetic; empathetic would be more appropriate in that we’re all in this boat together,” she says. “And help them to understand our perspective on things. ‘This is what we’ve done; this is why we’ve done it. This is what we need you to do to make it successful. Here’s why we think it can be successful; here’s the result we’re looking to achieve.’ If there’s any kind of associated compensation or reward to that, tell them what that would be — it could simply be you get to keep your job. I like to do these sort of emotional talks about how it impacts you and then I like to focus on the statistics, because that helps take some of the emotion out. ‘Here’s what we’re expecting to achieve on a P&L-type level.’ Coming up through the ranks, I’d heard very often people need to have a pat on the back, but that’s a tough thing to do without it feeling condescending or insincere. You don’t need to tell them, ‘Hey, you did a great job,’ every other day. That will be addressed in a lot of different ways. To help it be more sincere, use good examples as examples of what to do as opposed to calling people out for bad examples.”
Get your people moving forward
As she was getting her people to support the company’s actions to combat the downturn, Krings made some uncommon moves to spark some momentum: Travel Solutions hired three salespeople and expanded its product line.
While it may seem counterintuitive, the initiatives came as part of a Growth 360 initiative that Krings led that took a look at all the internal efficiencies of the company, including a new building lease.
A quality review like that starts with a basic question: What is the core business you are in and how are you doing in that? The answer led to hires and cuts for Travel Solutions, as Krings and her leadership team found some inefficiency in their processes and also some opportunity to expand sales with clients by adding products they should have already been using.
“It seemed counterintuitive even on the inside, when we’re saying we’re going to reduce staff but we’re going to hire salespeople, so one of the things we knew we had to do was secure additional business,” Krings says. “We’re a transaction-oriented business, so if our sales are down, our transactions are down. If our transactions are down, we need more of them.”
But when you want to make a move like that in a bad cycle, you have to do it a little more carefully and with a little more thrift. While Krings didn’t want to share the exact model Travel Solutions used, she says she hired extremely seasoned salespeople and their pay scale was heavily performance-based.
“What we found out there is the sales folks who were confident in their capabilities were accepting of a creative compensation program, so we basically have a pay-per-performance type of program, all of them have the ability to make a lot
more money than I do,” she says.
Krings says that model did exactly what it was intended to do: turned off middle-of-the-road candidates and kept costs low.
“As soon as we mentioned pay-per-performance, if they started to gloss over, it was like, ‘OK, you can leave,’” she says. “I could tell it was a confidence issue.”
While Krings says it’s too early to call the hirings a roaring success, because Travel Solutions’ sales cycle is so long, the results thus far have been solid, and she says the company has built a heavy pipeline of business in a time when many travel companies are going under.
Make your cuts quickly
While cutting costs couldn’t be Travel Solutions’ only strategy, it is a fact of life in severe downturns. Still, Krings wanted to do it with some strategy. The first thing she wanted to do was be careful about who she let go.
“We have a very rigorous human resource and development initiative, and we identify those who are in trouble basically and who are having difficulty performing, and we document those things and we coach them,” she says. “But there is this obligation that we have to tell somebody, ‘You’re not going to be successful here,’ because they may just hang around for the sake of drawing a paycheck, and it hurts them because they know they’re not a contributor and it hurts everybody around them because they’re the ones that have to pick up the slack.”
While you can probably name the people you’d cut quickly if you had to, the second cut is the deepest. Krings says the second group of layoffs came from people they were coaching whose career track had them some ways from being highly productive.
What’s important at each stage is to tell people and do it in the same day if possible.
“We were sharing with everybody, ‘This is what’s going to happen and here’s what we’re looking at,’ and it happened very, very quickly in terms of laying people off, because we don’t like this stuff to linger,” she says. “If you’re going to take action, you announce it and you do it. You do it fast and you do it well.”
If you don’t do that, you’ll lose the wrong group of people.
“The timing is absolutely tethered with the success of the emotional outcome,” she says. “When you let it linger, folks will again start drawing their own conclusion. You may end up losing people you want to keep because they might be some of the most employable and they hop on that job search bandwagon and you’ll be out your top producers.”
By doing cuts as she announced them, Krings was surprised to find that what she thought would be a somber day was actually an OK day. In fact, a few people who knew they weren’t cut out to stay at Travel Solutions thanked her. Not everyone was that happy, of course, but the quick cuts made for a clean break. In the time following the layoffs, the company was able to ask others to make concessions because it told everyone that each person was a part of a group the company wanted to keep. Krings told hourly people they’d have to take a few less hours and were surprised to see people volunteer.
“Initially it was, ‘Gosh, I hope I’ll be able to pay my bills,’” Krings says. “Then it turned into we had some folks who came forward and volunteered, and we had one gal who said, ‘I’d love to take the summer off; I just had a baby. Can I come back in September?’ and we said, ‘Yep,’ that takes a little bit of stress out of it. … The general consensus after a couple of weeks was we are all in this together, and we’re kind of fortunate that we have the option to make this choice instead of laying off a few more people who we considered people we wanted to retain.”
All this is not to say things are perfect at Travel Solutions, but Krings’ multifaceted attack of the downturn has helped her company start to dig its way out.
“We’re starting to see teeny-tiny upticks,” she says. “I don’t think we’ll be a turnaround that we go from one day to the next and everything is all rosy, though.”
But while things won’t immediately be all rosy, Krings’ plan to do more than just cut has put Travel Solutions in better shape than before the downturn.
“That’s the biggest part of what I feel we’ve been most successful at, is using this as an opportunity to build a plan that’s sustainable across a fairly long period of time and provide us a business model that keeps us in a healthy state,” she says.
How to reach: Travel Solutions Inc., (614) 901-4100 or www.ts24.com